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A cookie is a technique for remembering something about you.
Without cookies, a website is like a goldfish that loses its memory every time you visit a new page. Once you visit a new page, it doesn't remember who you are.
Now this can be a good and bad thing. Without any memory, a website can't do a lot of work. It can't let you log in, because it forgets who you are. It can't let you buy anything, because it forgets what you're buying.
Cookies aren't automatically good or bad, but it's worth understanding what you can do about them.
You can turn them off completely, which is like banning all music to prevent another Justin Bieber album. Many websites will not work.
A better option would be to turn off third party cookies, which will prevent most websites from sharing information about you. Some browsers - such as Safari - do this automatically.
And finally, you can take an in-depth look at any website that concerns you. Most websites have policies that state what they do if you want to watch.