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EBooks have already replaced paper books for me in terms of fiction. Where they can't currently compete is in the area of reference works and photo/art-type books.
For fiction, ebooks have many benefits over paper, such as being searchable (very useful in a long books where you want to refresh your memory about where a particular character last appeared in the story), and being able to store an effectively limitless number of books on an pocket-size external drive.
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