I've always been under the impression that you cannot resize a raw image. Adobe Smart Previews seem to do just that - you keep all the power of raw images, just in a much smaller size. How does this work? What do you end up sacrificing besides resolution? What's going on under the hood that even makes that possible?

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The smart preview is not the RAW file. It is a preview of the RAW file to see the effects of your edit. The only thing it is used for is to have something to see while you do the edits. It is not real time editing. Your edits are stored and then later applied the actual RAW file when the editing device is connected to the RAW storage device. If you do not do this, the edits are undone and review files are useless as they are very lossy low res files. They are quite often applied to the RAW files via the Cloud. If they are both on the same device, then when you are editing, below the histogram it will say "RAW + Smart Preview" and you will be editing the RAW.

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