On 7 July 1994, the Fraunhofer Society released the first software MP3 encoder called l3enc. The filename extension .mp3 was chosen by the Fraunhofer team on 14 July 1995 (previously, the files had been named .bit). With the first real-time software MP3 player WinPlay3 (released 9 September 1995) many people were able to encode and play back MP3 files on their PCs. Because of the relatively small hard drives back in that time (~ 500–1000 MB) lossy compression was essential to store non-instrument based (see tracker and MIDI) music for playback on computer.
What was the filename extension?
.mp3