It is a file that basically gives permission for your device to install that firmware. Basically if you have it, it signs it for you after it can no longer be signed (restored to). It requires you to save the blobs while they are still being signed by Apple then you can preserve them for later basically (In other words, it allows you to downgrade to that version).
Other then that there is no way to downgrade, you either stick with what you have or update to the latest.
If a jailbreak comes out however you should save your blobs to be able to downgrade to that version.
But if you would like just save your blobs for every new (signed/latest) version so if there is ever a jailbreak for those versions you can go back to them later.