Can I back up one external hard drive to a smaller external hard drive via Time Machine? So I've just had an external hard drive (5TB Seagate Backup Plus Portable) fail on me, the 3rd such time in 5 years. This is not unexpected behaviour in my experience: each of these hard drives has been read &amp; written from basically 24/7, has failed at a point with less than 10% free space available, and I am always adding more data to them.
I back up all of my data via Time Machine to a second external hard drive (8TB Seagate Backup Plus Desktop), which I've had for about 5 years now; it is still working, despite having run out of storage space on two prior occasions, necessitating some cleaning up of old backups. A checkup with Disk Utility reveals no problems.
I am looking at replacing the failed hard drive with a larger one, which will necessitate buying a desktop drive, since no manufacturer currently makes a 6TB+ USB powered hard drive (except LaCie, but that drive is USB-C powered, and I only have regular USB 3.0 ports). My plan is to purchase a 10TB desktop drive, as 8TB desktop drives are not available in stores where I live at the moment.
The question is:

Can a 10TB drive be backed up via Time Machine to an 8TB drive if it is only partially full (in this case, roughly 4.5TB of data)?
If so, how long can I expect the 8TB drive to last if it continues to be used almost entirely for backups? (In the best case scenario, I would need to be able to continue using it for 2 to 3 years until data needs force me to get a larger one.)
Question 1:
The short answer is 'yes' so long as there is room for the data.  But:
Time Machine will backup your system disk plus your 10 GB disk to another disk which has is large enough for the data you have plus space for future changes.
You might consider benefits of using Time Machine for just your system disk, but to use something else for backup of your external 10TB drive.  Examples I would recommend are Carbon Copy Cloner and Chronosync. Using Chronosync in a one way sync is appropriate if you occasionally (or frequently!) reorganise your data - this is not Time Machine friendly.
Question 2:
Only you can answer that as it depends on how much data you expect to add.
A longer answer is that you would seem to be a good candidate for using a NAS.
Caveat: I have attempted this answer with the assumption that your only disks are internal system disk and the two externals.
Aside: For always on continuous use I prefer a mains powered disk (desktop) over a bus powered (portable) hard disk drive.