CPU will 4 cores be enough for direct streaming

[Whosondephone]

It depends on how many users you have and what model CPU.  4 cores from a CPU from 2011 isn't going to cut it, but 4 cores from 2026 will.

However, hardware accelerated transcoding is always preferable.  Most modern (Skylake and later) consumer Intel CPUs have an iGPU with Quick Sync with decent codec support and performance.  Tiger Lake has pretty decent codec support.  As long as you enable hardware transcoding, it should do a pretty good job.

What you're seeing with the banding likely has to do with color depth of the source video and how it was encoded.  I'd have to see what ffmpeg command parameters are being used for your transcode to explain the smoothing of the color bands.

I'm running a Intel Core2 Quad Q8200 (4) @ 2.33 GHz.  Direct Play and Direct Stream (Transcodes audio but leaves original video untouched.) are working flawlessly with one client.  Could probably handle more.  4K HDR works perfectly.  My only bottleneck seems to be the wired Ethernet chip-set on my TV.  Decripted UHD bluerays @ 80GB stutter.

And yes my PC has a light scribe sticker on it!

Edit: I almost forgot that this machine did struggle running Jellyfin with 4k streaming when it ran Windowes 10. Don't remember which version it was, Version 8 perhaps? Running Debian has been smooth sailing. A couple bumps with updates which got ironed out. Currently running 10.11.10.