It serves two purposes on a PeerTube instance: it ensures all videos can be played optimally in the web interface, and it generates different resolutions for the same video.
It's based on <a target="_blank" rel="noopener noreferrer" href="https://activitypub.rocks">ActivityPub</a> to connect with tools <a target="_blank" rel="noopener noreferrer" href="https://peertube.cpy.re/videos/watch/da2b08d4-a242-4170-b32a-4ec8cbdca701">like Mastodon</a> for example.
It's based on <a target="_blank" rel="noopener noreferrer" href="https://en.wikipedia.org/wiki/WebRTC">WebRTC</a>, a free and open-source project for web browsers.
Let PeerTube save and store your original video file so you no longer have to keep it on your hard drive anymore (this option must be enabled by your administrator)
Other Framasoft's volunteers and salaried members also contribute to the PeerTube project on various aspects (strategy, communication, development, community animation).