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upper limit size for loopback storage


i am creating a test 400mb loopback storage:

# dd if=/dev/zero of=/jnkdsk  bs=400M  count=1
# losetup  /dev/loop1 /jnkdsk
# mkfs.ext4 /dev/loop1
# mount /dev/loop1 /mnt/jnkdsk

in day to day usage of loopback storage
in terms of I/O performance, susceptibility
to data corruption ,etc,etc ....  what is
the upper limit size after which it's not
recommended to use loopback storage?

thank you,