1. A method for block-based encoding of an image having a plurality of blocks of pixels, the method comprising: selecting a quantization step size for each coefficient position of a block-based transform, wherein the selection is based on realizing a predetermined pixel domain distortion per block of pixels; applying the block-based transform to each of the blocks of pixels to generate a set of transform domain coefficients for each block of pixels; for each set of transform domain coefficients, quantizing each of the transform domain coefficients using the selected quantization step size for that transform domain coefficient's coefficient position to produce a quantized coefficient; and encoding the quantized coefficients to generate a bitstream of encoded image data.