This tool shows the IP address of your machine as it’s visible to the rest of the world. While this sounds pretty simple, the truth is that IPs are an extremely nuanced concept, and in fact, the IP shown isn’t even yours!
IP addresses are a way for people on the Internet to reach machines (servers) available to everyone to visit. Since you’re on a home or office computer, there’s no way someone from another part of the world can “visit” your computer (there’s no web server running there, after all).
The IP address you see on the screen is actually the public IP address of your Internet Service Provider (ISP), though for all practical purposes on the Internet that is indeed your IP address. :-)
Knowing your IP address can be important information in many cases. For many cases, if a website says it blocks IP addresses in a given range and your IP address happens to fall in it, you know that it’s not a technical problem you’re facing.
Similarly, there are times when API vendor or product support will ask you to provide your IP address to restrict access to your account.