What is MQA, technically
MQA (Master Quality Authenticated) is a proprietary audio container that claims to deliver studio-master fidelity in a stream small enough for typical broadband. Here is what it actually does — and what it does not.
The container
MQA wraps a standard 24/44.1 or 24/48 PCM stream. The upper 8 bits of each sample are normal PCM. The lower bits encode the high-frequency content of the original 24/192 master, folded down using lossy compression and authenticated with a cryptographic key.
The unfolding
A first "core unfold" in software brings the stream back to 24/88.2 or 24/96 by extracting the folded high-frequency content. A second hardware unfold ("MQA renderer") brings it to 24/176.4 or 24/192. A full "MQA decoder" does both. Without any MQA-aware processing, you hear the underlying 24/44.1 with the lower bits as a slight noise-floor increase.
Is it lossless
Below the 24/44.1 (or 24/48) base layer, MQA is bit-perfect to a standard CD-quality stream. The folded high-frequency content above that is lossily reconstructed. MQA Ltd. claims the reconstruction is psychoacoustically transparent; that is a contested claim.
When it matters
Two situations: (1) you stream from Tidal Master tier on a non-MQA DAC — your DAC plays the underlying 24/44.1 fine, but you do not get the unfolded high-frequency content; (2) you have an MQA decoder DAC — you get the full unfolded resolution but you also pay an MQA license premium in the hardware price.