Official comment
Hey Don,
You can use whatever you'd like (although I'd avoid Western Digital Passport drives ... those always seem to be problematic), whether it's a USB flash drive, SSD, or conventional hard drive.
I keep my entire library on an external SSD, then I have exported the playlists and library to that drive as well (which prepares an "export library" for the players to read). You don't need to worry about it doubling-up on the space required, as the software now recognizes that the origin and destination are the same, it doesn't duplicate the file when exporting, it simply links the source.