A Photoshop Smart Object is a version of your original text or graphic, a sort of proxy. You can edit and re-edit a Smart Object without losing one pixel of information, and the changes you make to a Smart Object never affect the original (unless you want them to).
If you’re familiar with Illustrator or Flash, think of Smart Objects as the Photoshop cousins of Symbols. One symbol can have an infinite amount of instances, with different sizes, placements, and occurrences. If you change the source symbol, all instances of that symbol reflect that change.
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