This would be an item you keep in your inventory. It would automatically compact any items that have a reversable recipe in your inventory (eg, coal, redstone, gems, compressed cobble), in the same way the Compactor Drawer works.

@bookerthegeek Would you know the name of the mod that adds upgradeable backpacks, where one of the upgrades is a compacting upgrade?

EDIT: It's Iron Backpacks

That is very.... Lag intensive. I would look into how blood magic does that woth their compression sigil.

Well, obviously I didn't search hard enough for existing mods. Something for 1.11 remains to be seen though.

Thanks for the suggestion, but I think this is better left to other mods (like aforementioned Iron Backpacks).