Will SharePoint store each version as a whole physical copy or just the delta difference in disk? This information is required for sizing considerations.
Its depends on the SharePoint version.
If you are using the SharePoint 2010 or older version then SharePoint Store copy of document every time a new version is created. I.e. A document of 10MB with 10 version will be 100MB in storage.
But if you are using the SharePoint 2013 or 2016 then you can take the advantage of Shredded storage, which mean every time you create a new version it stores only delta. http://www.jeremythake.com/2012/12/the-truth-behind-shredded-storage-in-sharepoint-2013/