Watching 1080p clips on 720p monitor?

Can someone please explain this to me. Can i watch 1080p youtube clips on my 720p monitor? What i realized is that 1080p clips indeed look better than 720p ones but that's strange because my 1366x760 monitor obviously isn't full hd.
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More about watching 1080p clips 720p monitor
  1. Because of Youtubes stupid compression, and downscaling.
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