With either method chosen, the picture will be compressed which degrades the quality a bit.
The “old” method of image compression (Most Compatible) is jpeg (.jpg) that’s been around for more than 40 years and every electronic device that can display an image can read a .jpg.
The “new” compression method used on iPhones (High Efficiency) is called HEIF (High efficiency Image Format).
This compression can and usually does leave less artifacts on the image (especially on blue skies) so it’s the best choice to potentially save the image with the best quality. Also file sizes tend to be a bit smaller.
The problem with HEIF format is that older computers and smartphone operating systems don’t know what it is so can’t display it.
For me personally, an iPhone is just a snapshot camera anyway. I don’t care if there’s a tiny bit of degradation in the photos. They never look great no matter what format you choose.