What are Backlinks and why people use them?

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I have little problem and need help from MyLot members. I don't understand what are backlinks and how they work? I read that if you use backlinks you can increase traffic to your site. I would like to use them, but don't know how. I would be grateful if you write me some sample of backlink. If i would use my site www.abcd.com, how would backlink look like? Thank you all for your help!