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In this video, the speaker explains why it is beneficial to store files on your local storage instead of solely relying on cloud storage. Initially, chromebooks had limited storage because they were designed as cloud computers. However, with the addition of android and linux apps, more storage is now available. Despite this, many users still prefer storing files locally, as downloads default to the local storage. As a result, it is important to consider the advantages of utilizing local storage for file management on chromebooks.