We have our log files gzipped to save space. Normally we keep them compressed and just do

gunzip -c file.gz | grep 'test'

to find important information but we're wondering if it's quicker to keep the files uncompressed and then do the grep.

cat file | grep 'test'

There has been some discussions about how gzip works if it would make sense that if it reads it into memory and unzips then the first one would be faster but if it doesn't then the second one would be faster. Does anyone know how gzip uncompresses data?