[1] They are crucial for recovering from database server crashes; by rolling back any transaction which was active at the time of the crash, the database is restored to a consistent state.
Other transactions dependent on T1's actions must also be rollbacked due to T1's failure, thus causing a cascading effect.
In SQL, ROLLBACK is a command that causes all data changes since the last START TRANSACTION or BEGIN to be discarded by the relational database management systems (RDBMS), so that the state of the data is "rolled back" to the way it was before those changes were made.
[2] A ROLLBACK statement will also release any existing savepoints that may be in use.
In most SQL dialects, ROLLBACKs are connection specific.