Imagine your computer as a classroom full of kids (programs) doing activities. Over time, they make a mess (memory leaks, cached files) and might start arguing (software conflicts). Turning off the computer is like sending the kids home and cleaning the room. When you start it again, the room’s clean and everyone starts fresh. Simple as that.
Agree with the other comments explaining why many computer systems have to be restarted from time to time. I wanted to point out a very fundamental reason, though – it simply isn’t a big requirement for many computers to be up for years at a time. If, for example, most Windows and Mac users demanded that their machines have years of uptime, then they would. But you’d trade that for a lot fewer features, which is really what most users are bewitched by… features.
Momentary power dropouts can be an issue if your grid is not great and if your equipment is not using a UPS (uninterruptible power supply) or is not otherwise protected. A dropout can be like turning your computer off and suddenly changing your mind and turning it back on. When turning off, all the RAM (the memory bits, i.e. the 1’s and 0’s) will clear, but this does not happen instantly, so if the power comes back quickly enough, the computer will continue to run but may have random bits cleared. At this point, the computer is in an indeterminate state, who knows if/when it will stop working, and the only fix is to restart it. At the company where I worked, if a momentary power dropout happened, the procedure was to stop all testing and power cycle all the computer equipment. (And not a mere reboot, but shut down, count to 10–to give everything a chance to clear–and only then start back up.)
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