The quality of a video is determined by the bitrate (how many bits per second of video) and the number of pixels
When you stream play a 1080p video, it compresses the video. When you play a bluray at 1080p it is also compressed but has a much higher bitrate so even though both are 1080p, the bluray will be better quality
when you stream a 4k video, the number of pixels is higher so it needs a higher bitrate to keep it an acceptable quality. You are still only displaying 1920*1080 pixels but because the bitrate is higher, it will generally look better
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