In what bits are colors rendered?

Hello,

I am just curios since I got to texturing and everything about it, there are a lot of topics about 8bit sRGB and 16bit Linear RGB. I just don’t get what is happening. So every monitor is showing image in 8bit sRGB. Even if you work in 16bit linear RGB you have to convert it back to 8bit sRGB anyway right? I cannot sleep because of that. I started using Substance Designer and in optimization tips there is said “Use 8 bit when 16-bit is not needed. (Note that the Substance CPU engine does not actually support 16-bit color or 8-bit greyscale. The GPU engine supports all 4 combinations of 8/16 bits and greyscale/color. Currently, only the CPU engine is used in Unity and UE4)” I really dont understand this. So what is the output???

Thank you.