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EDID (Extended Display Identification Data) is a metadata standard for display devices such as monitors, projectors or video splitters to communicate their capabilities to a video source. This includes the display size, video input type, color characteristics, and (for digital displays) pixel mapping data. This information allows the video source to then send out a video signal that is supported by the monitor.
It can sometimes be useful for the video source to read this information from a file instead of from the display itself. For example, switchers and cable extenders can cause the display EDID to be lost. With the EDID being read from a file instead of a device, the OS will always assume the display is attached. This way of managing EDIDs also provides protection against hot plug events which often times lead to reconfiguration of your displays.