It's basically a big lookup table, trading storage for speed.

The most noticable effect is that your web pages load faster, because a lot requests for unnecessary data (eg. Facebook in this example) complete immediately. Occasionally you will miss out on a webpage that depends on it.

Think uBlock Origin, but not for just your browser but your entire system.

Thanks I have used /etc/hosts for a long time. I however just realized exactly how big mine is getting.

I've seen no noticeable impact to 100k+ lines.

This is good to know. Thank you for the reply.