Bit Depth

Keywords: 8-Bit, 16-Bit, 32-Bit

The Bit Depth of a texture refers to how much data it stores per pixel. Different tasks require different amounts of data. If you just want a nice color on your mesh, an 8 bit texture will be enough as it can be any of 256 levels of gray per channel. This gives you a ton of color options, 16 777 216 colors to be exact. However, if you want to use it for something like displacement, having 256 distinct steps might not be enough. Then you'd have to use 16 bit or higher.

For VFX artists a usecase for 16 or 32 bit textures are Vertex Animation Textures (VAT). If your verts move more than 256 units from it's minimum to its maximum position during the animation, you either need to use a texture with higher bit depth or shrink it down and scale it back up again on the engine side. It's a tradeoff between file size and precision.

More info can be found here:

https://www.cambridgeincolour.com/tutorials/bit-depth.htm