what if it's set below 100%? sound quality would be effected by reducing bit or anything...?
Thanks.
Depending on your output device and your source material, using MC's internal volume may result in no information loss, or it may result in some theoretical information loss, but those issues exist with
any digital volume reduction. An example of a case where there's no information loss is when you output a 16-bit audio file to a DAC that supports 24-bit output. In that case any internal volume attenuation in MC less than 48 dB or so will not even theoretically discard any audio information. In the case of 24-bit audio on a 24-bit DAC, using the volume control will result in some loss of information, but it will result in the loss of very, very quiet information that is almost certainly inaudible in home conditions. For example, if you attenuate a 24-bit file by 24 dB using internal volume, your music output now has a maximum dynamic range of 120dB, but unless you are reproducing music at volumes that would give you hearing damage, sounds 120dB quieter than the peak will be completely inaudible (by a wide margin) in a normal home context.
But as noted, those would be issues with any digital volume control, so unless you plan to control volume using an analog switch/potentiometer with MC's volume disabled and all other digital volume maximized, you're not getting around the issue of theoretical information loss with digital volume controls. Most modern receivers, for example, have a digital volume control, so they're subject to the same issues.
MC's digital internal volume control is a high quality 64-bit volume control, which is likely to be better than other digital volume controls you encounter, so using MC's internal volume is probably the best solution for digital volume control.
And even if you had an analog volume control, there are other sound quality issues potentially involved with those, so it's not as though that option is clearly better. It just presents different issues.