The estimatesmartfee RPC estimates the fee per kilobyte needed for a transaction to begin confirmation within a certain number of blocks. It also provides the number of blocks of which this fee estimate is valid.

How is this used?

You're trying to catch a bus, but you're not sure how much the fare is since it changes depending on the time of day. You want to ensure you pay enough to get on the next bus without overpaying. The 'estimatesmartfee' command in the Bitcoin network functions similarly by estimating how much you need to pay for your transaction to be processed within a certain timeframe, like catching the next few 'blocks' of transactions.