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tarpipes can handle gnarly piles of hardlinked files without sweating. BackupPC is free software for network backups that builds a massively hardlinked file pool; tarpipes are the only thing that can reliably copy BackupPC pools from one location to another.

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Not so. Both the sending and the receiving tar processes will need a data structure keeping track of which inodes they've already processed. They can skip inodes with a link count of 1, but if all inodes have multiple links (as in this case), the overhead will be twice that of a single cp process.

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