File extensions are used to differentiate one type of file from the another. Computer files can contain any information and figuring out what exactly is stored inside the file could be problematic without opening it. That is why concept of file extension was introduced to give more clarity into what kind of information is stored inside the file. For example, if file extension is JPG or JPEG then the file would contain an image in JPEG format. If file extension is DOCX or DOC then the file would contain Microsoft Word document.
File extension is typically a short string at the end of the filename. It is separated from the file name with a dot symbol. It is possible for a file to have multiple file extensions but only the last one will be used by the operating system.
File extension help computer operating systems in finding which program should be used to open a specific file. When user double clicks on a file operating system first reads file extension of the file. Then it checks it versus database of all applications and extensions which they can open. If there is a match, then an application will be launched which can open that specific file extension.
Another useful case when extensions are extremely helpful is file search. Suppose you need to find all image files on the computer. Without file extensions operating system would have to look into each file, figure out if it contains an image inside and based on that add it to the search results list. This would take an enormous amount of time. With file extensions everything is simplified. To find image files operating system will need to only scan file names and find files which have a file extension corresponding to images (like PNG, JPG, BMP, etc.). This could be performed much quicker since there is no need to even look inside the file.
Each operating system maintains a list of applications which can open specific file extensions. When new application is installed it notifies operating system about file extensions it supports. Based on this information operating system updates its file extension database. If there are multiple applications which can open a specific file extension, then user will need to choose which one will be used by default.
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