A tank stores forty or fifty gallons and reheats it around the clock, losing heat through its walls all day — standby loss, paid forever. A tankless unit sits cold until a tap opens, then fires a burner or elements hard enough to heat water as it flows through. The result is a flow rate instead of a tank size: the unit delivers so many gallons per minute at a given temperature rise, endlessly, but never more than that rate at any instant.
That trade — unlimited duration, capped simultaneity — is the whole decision. A household whose hot-water life is sequential, showers after workouts after laundry in a polite queue, thrives on tankless. A household that runs two showers, the dishwasher, and the washing machine in the same twenty morning minutes must size for that peak or feel the temperature sag when demand exceeds flow. Neither household is wrong; they need different arithmetic, and performing it honestly is most of our job on a tankless consultation.