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Since having file backups on the same drive as your OS, takes up a lot of unnecessary space (not really improving system performance either)... I prefer having my iCloud folder on an external harddrive instead.
Can anyone explain me how to do this?

- The same can be done with Dropbox, which I already have installed on my external harddrive... so I assume this can also be done with iCloud??
(both are cloud services, so it shouldn't NEED to be on your OS drive --> software wise there's not much difference between the 2)