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The setting controls the block size. When writing to block devices, you can maximize throughput by tuning the block size for the filesystem, architecture, and specific disk drive in use. You can tune it by benchmarks and searching over various multiples of 512K block sizes.

For most modern systems, 1MB is a reasonable place to start. Even as high as 4MB can work well.

The block size can make a major difference in terms of sustained write speed due to reduced overhead in system calls and saturation of the disk interface.

A similar thing happens when writing to sockets where lots of small messages kill throughput, but they can decrease latency for a system that passes a high volume of small control messages.