A real time clock is basically just like a watch – it runs on a battery and keeps time for you even when there is a power outage! Using an RTC, you can keep track of long timelines, even if you reprogram your microcontroller or disconnect it from USB or a power plug.
Most microcontrollers, including the Arduino, have a built-in timekeeper called millis() and there are also timers built into the chip that can keep track of longer time periods like minutes or days. So why would you want to have a separate RTC chip? Well, the biggest reason is that millis() only keeps track of time since the Arduino was last powered – . That means that when the power is turned on, the millisecond timer is set back to 0. The Arduino doesn’t know that it’s ‘Tuesday’ or ‘March 8th’, all it can tell is ‘It’s been 14,000 milliseconds since I was last turned on’.