Well actually, when an animal evolves, in most cases they don't lose DNA. Certain genes are just shut off and turned on.
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What determines that?
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It is caused by an error in DNA duplication. You have three types of DNA duplication errors that can occur at the base pair level. Substitution, which is when one base pair is switched with another. Deletion, when a base pair is removed. And an addition, when a base pair is added. The change in the base pair can then be replicated as the DNA copies itself. The change in the base pair will then cause different codons to me be formed in the transcription process. There by creating a different protein. Most of the time these changes either do nothing, or are harmful to the organism. However sometimes these changes can be beneficial, such as the ability of most humans to synthesize lactase, and enzyme needed to digest daily, which all other mammals and early hominids loose in early childhood. Because it helped the organism survive and reproduce, over time it became more common in the gene pool.
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...but this doesn't add new information. As you said, DNA is only duplicated or copied incorrectly, not added, and whenever there's a decrease in genetic info, there's always an inherently bad mutation that ends up being detrimental to the organism. Correct?
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An understandable misconception, no, the loss of genetic information will not always have a delirious outcome. Though more likely to be a net negative then a positive, some mutations can be advantagous. And base pair addition does add to the nucleotide sequence, in effect increasing the amount of genetic material.