What is the brake fluid used for?

It is a hydraulic fluid used in the brake system – transfers the pressure applied from the brake pedal from when you step on it to the brake mechanisms of the car.

The brake fluid is hygroscopic thus absorb water/moisture from the atmosphere. If water gets in then it will decrease the performance and reduce the boiling point of the fluid (thus require change quicker) – when the brakes are applied alot of heat is generated therefore they need to have a high boiling point to be able to function properly.