Hardware / OS

[TheDreadPirate]

For Jellyfin clients, if the client cannot play the video as is the server will transcode and send a compatible format. Kodi does not transcode client side, but it will software decode. Jellyfin clients, mostly, will prefer hardware accelerated decoding for video since software decoding performance can vary widely depending on client's hardware.

If you have a spare GTX1060, that is a perfectly good GPU for transcoding. I used a GTX1070 for a while. But if you are going to spend money to acquire a GPU for the express purpose of transcoding, Intel Arc is the gold standard in terms of encoding quality. What Arc gives you over the GTX1060 is AV1 encoding support. If you were to buy an Arc GPU, they all have the same encoding engine. The only meaningful difference is VRAM, which is important for HDR to SDR tone mapping.