With PhotoDump Export App, a 256GB iPhone can still move a 2TB library to a 2TB SSD. Here's the actual mechanism.
An iPhone with 256GB of storage, iCloud Photos set to "Optimize iPhone Storage," and a library that's quietly grown to 2TB in iCloud over the years — the phone only ever kept previews and whatever was recently opened. Buy a 2TB external SSD, and the obvious question is: how does a 256GB device move 2TB of data anywhere? It would need to "hold" all of it first, and it can't.
PhotoDump processes the library one file at a time (or a handful concurrently). Each file gets downloaded from iCloud if needed, written briefly to the phone, copied to the drive, confirmed, and the temporary copy deleted — all before the next file starts. At any given moment the phone is only holding whatever's currently in transit, typically under a gigabyte total. By the time the whole library has moved, the phone's storage is back where it started, and the 2TB lives entirely on the SSD.
A minute of 4K video runs several hundred megabytes, and ProRes on newer iPhones is bigger still — video is usually what pushes a library from tens of gigabytes into the terabytes, not photos. It moves through the same one-file-at-a-time process, so archiving years of 4K or ProRes footage doesn't require it to ever fit on the phone.
The same drive can hold more than one iPhone's library. Each device gets its own folder, so a household can put everyone's photos on one shared 4TB or 8TB drive without anyone's files getting mixed together.