VMFS datastore can be configured with 4 available block sizes

1 MB, 2 MB, 4 MB & 8 MB. Please choose block sizes according to the requirement when creating VMFS data store.

1 MB block size means that the file of 1kb will also consume a space of 1 MB.

but not to worry as VMWARE dont have smaller files & this block size doesnt have any impact on NTFS block sizes.

choosing acorrect block sizes is important because if you choose a block size of 1 MB then you will not be able to create file more then 256 GB of size.

1MB block size – 256GB maximum file size
2MB block size – 512GB maximum file size
4MB block size – 1024GB maximum file size
8MB block size – 2048GB maximum file size

So as a thumb rule if you have ample space consider block size of 8 MB.

Note:- you cannot change block size after you have set it initially…

There is no noticeable performance difference by using a larger block size