I haven't heard that one before, about external hard drives being faster for screen recording. There are a lot more variables to consider.
Here is what I do know.
1. On a Windows PC, most external hard drives are connected via USB 2.0 or USB 3.0
USB 2.0 is way too slow and will actually be worse for you. So if you were going to use an external hard drive, you must connect via USB 3.0 (blue connectors) to get decent speed. If you bought a really modern computer, there is an even better connection to use which is Thunderbolt. However external drives that have Thunderbolt connections are not cheap. You also need to make sure your external hard drive is running at 7200rpm and not 5400rpm.
2. SSD Solid State Drives are faster than recording to Hard Drives - much faster.
So if you are using a Desktop computer and have spare SATA connections, installing a SSD using Sata3 connection is the best option.
3. Connecting two Hard Drives internally using a RAID configuration will give you fast recording ability.
4. Build a new computer and use the brand new M.2 protocol or PCIE connections, and connect and SSD that way - this is now the fastest drive you can use on any computer system.
To get more information on this topic, I suggest you check out the Linus Tech Tips Forum.
There are plenty of big brains hanging out on that forum.
linustechtips.com/main/
Linus just posted a new video which explains some of the newest tech you can get, which is related to your question.
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