Casting - which device plays the file?

[standing and walking]

Possibly stupid question. I'm curious about what's happening when I'm using the renderer to cast VLC to my Vizio TV via my Mac. Is the Smart TV playing the video file itself a la YouTube/Netflix, or is it just displaying the video the computer is playing, like when I cast a whole tab from Chrome?

Is there a loss in quality casting a 1080p MKV file vs a direct HDMI connection? Thanks!

[fkuehne]

It is a bit more complex. Depending on the used codecs in your media, VLC will decide dynamically whether it needs to convert the content for your Chromecast or whether it can send it unchanged. If it needs to convert, there is an inevitable loss of quality, if it does not, there is not.
Additionally, you can enable the advanced option to directly send AC-3 / DTS content your TV to have it handle the multi-channel decoding.