What does rooting your phone do?

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You can install custom ROM , have more administrator privilege over your device, I don't think it's necessary anymore but some still do it and if they have a older device to get to higher Android version.
 
Well if you're familiar with a Windows PC or a Mac computer, you can set up multiple user accounts. A typical way is to have an administrator account and user account. The administrator account is only used as to do system level tasks and maintenance, the user account has limited permissions and restricted access to some of the protected operating system functions. It's the user account that should be used as the daily usage account, and the admin account only when needed. (Sadly most people set their Win PCs to always log into the admin account, a very, very bad idea as that allows not only the user unfettered access to what should be protected operating system functions also makes it trivially easy for compromises and exploits to take over those same operating system functions. Most people whine and moan about how bad Windows security appears to be, but the fact is most of the time it's because they've intentionally created their own problems. When it comes to a question of convenience vs security, most people choose convenience ignoring the consequences and despite all the dangers involved.)

With Android, the fundamental approach, by default, is to have just one user account, with its inherent limitations to unfettered access to the installed Android operating system on your phone. This is a basic security measure that isolates the operating system and minimizes exploits and such from being able to take over the phone. So if some exploit is installed, it's limited to just the user data partition. (There are some more advanced, insidious malware that can install themselves to the operating system but they're not very prevalent and usually targeted to select people.) Anyway, when you root your phone, that essentially changes the user account to an administrator account like with a WinPC. Those restricted permissions that protected the operating system are removed. This allows the user to do things like alter how base level apps/services function, or uninstall system-level apps, and of course totally screw up the phone if you don't know what you're doing. That's an important aspect, a lot of pundits tout rooting as a magic fix for anything but the fact is, rooting allows you to do a lot of things but it does not give you the knowledge to do so. Root your phone because you have a specific purpose and educate yourself about it thoroughly, but don't do it just because some goofball made a posting somewhere about how you can do this or that.
 
Rooting will give you all the power to your phone. As someone mustang7757 said you can increase the RAM. But I think rooting is for advanced users because they can take the full benefit from rooting. If you don't know what is rooting then you should not root your phone.