What is the difference in controlling volume through the software application, the system, and hardware?

Question

I remember reading somewhere that controlling volume through hardware was "better" than controlling through software. This begs a couple of more specific questions to me as someone who uses their computer to listen to music.

What's the difference between controlling volume in the application versus a dedicated hardware amplifier, like the Schiit Magni?
What's the difference between controlling volume in the application versus controlling computer's volume through the desktop environment? eg. The system's volume slider in Windows.

Basically, how does controlling the volume through these interfaces work to lower the volume, and which approach has the lowest impact on the music's quality?

Tetsujin · Answer

This is known as gain-staging.
In a pro environment this is done by watching the meters at each stage, setting levels to give the highest signal without ever going near distortion (leaving headroom). High signal gives a lower noise-floor, higher SNR (signal to noise ratio).
In a semi-pro or consumer environment with no accurate metering you can really only do this by a combination of guesswork & experiment; trial & error. With only two or three components in your signal chain you test which sounds better, high output with low-gain input, or vice versa. You'll probably end up with something vaguely in the middle, so neither is pushing too hard but neither is giving significant noise-floor.

What is the difference in controlling volume through the software application, the system, and hardware?

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