OK so the first thing is that a lightyear is a unit of **length**, like a mile. A lightyear is how far light travels in a year (25,310,000,000,000 miles). That’s a long way! But the important part is a lightyear is a *distance*.
So why do we use such a big distance unit in space? Because space is HUGE and the distances between places in space are very long. It’s the same reason you give your height in feet (or cm), the distance to the store in miles (or km) ; **we’re picking a unit that’s the right size for the numbers to be “nice” when you use that unit.**
* You *could* say that your height is 0.0009469 miles. That’s correct, but it’s messy. Saying “5 feet” just works better.
* You *could* say that your commute to work is 164042 feet. But “50 km” is much easier for people to understand and work with.
It’s the same with lightyears. You *could* say that from here to the next nearest star is 24,900,000,000,000 miles away, but that’s so huge it’s kinda meaningless, and a cumbersome number to start doing math with. Saying “4.24 lightyears” has many advantages. If we say one star is 4.2 lightyears away and another is 12 lightyears away, you can immediately realize “oh, that’s almost 3 times farther!”, but if you see 24900000000000 miles vs 70500000000000, your brain is like “…?” And since astronomy also involves lots of math, it’s nice to use a unit where the lengths are smaller more manageable numbers rather than using something like miles and then all the distances are 10+ digits long.
And as user Oblivious said, space is so big that even in lightyears some of the distances to stuff *still* gets into the trillions. Using any smaller length unit means those would be like 20+ digits long and we’d have to get familiar with the nonillion/decillion part of the numberline.
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