Bit depth — 8-bit vs 16-bit
Determines how many distinct values the sensor can record per band. 16-bit preserves dynamic range needed for quantitative work.
8-bit gives you 256 possible values per band. 16-bit gives you 65,536. 8-bit is fine for visualisation but throws away most of the sensor's dynamic range. 16-bit preserves the full range and is essential for quantitative work: reflectance, indices, time series, anything scientific.
When you need 16-bit
If you're computing NDVI, NDWI, or any other index where the absolute value matters, you need 16-bit. If you're doing time-series analysis, you need 16-bit. If you're a researcher doing radiative transfer modelling or biophysical inversions, you need 16-bit. We always deliver in the highest bit depth the sensor supports unless you specifically request 8-bit.