How does the STEP parameter work?

[melindafemminis]

When importing a georeferenced elevation raster as DEM raw data build, it is possible to chose the step parameter.
When it is increased the upload is faster.
How does this work? What is the algorithm behind it?
I would like to know how the data is changed by it.

[melindafemminis]

#adjust against step
	w, h = math.ceil(w/step), math.ceil(h/step)
	pxSizeX, pxSizeY = pxSizeX * step, pxSizeY * step

The X and Y pixel size is multiplied by the step value. So a DEM imported with a 0,5m by 0,5m will result in a 1,5m by 1,5m with step = 3.