Embedded vs. Linked Smart Objects
The January 2014 update of Photoshop CC added the option to embed OR link Smart Objects. (If you do not have Photoshop CC, you can skip this section). Until this Photoshop CC update, Smart Objects were always embedded in the Photoshop document. Although it made the file size larger, it was like a built-in backup plan because any placed files were included in the document. Now you have the option of embedding or linking the Smart Object.
To do this, you either choose File > Place Embedded or File > Place Linked. The main difference between the two options is that when you link a Smart Object, it continues to reference the original file. If you change the linked original, it updates in any file in which it was ...
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