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PSB exists because PSD hits a wall. Standard PSD files max out at 2 GB file size and 30,000 pixels in either dimension. For panoramic photos, high-resolution scans, large-format print work, and composites that exceed these limits, Photoshop saves as PSB instead. The format supports up to 300,000 pixels per dimension and no practical file size limit.
Internally, PSB is nearly identical to PSD — same layer structure, same channel data, same metadata. The difference is in the file header and offset calculations that allow for the larger sizes. Everything that works in PSD (layers, masks, smart objects, adjustment layers, blend modes) works identically in PSB.
The catch is compatibility. Far fewer applications support PSB compared to PSD. Photoshop and Photopea (browser-based) handle it. GIMP has limited PSB support. Most other image editors and viewers don't recognise the format. If your file doesn't need to exceed PSD's limits, save as PSD for better compatibility.