OAuth 2.0 and OpenID
The basic idea of OAuth 2.0 and OpenID is when a user wants to do something with an application (“Application X”). Access to the application requires access to an account of a company or business (“Service Z”) that would require authorization on the user’s behalf. To allow authorization in a good and secure way (without violating the users’ trust to ask for the their credentials directly), you can integrate something like Hydra into Service Z so that Application X can make authorized requests on the users’ behalf.
Understanding why something like Hydra is necessary in the first place is not entirely straightforward if you don’t already understand the use case for running an OAuth 2.0 server. Simply put, Hydra is an OAuth 2.0 authorization server that is both simple and straightforward. The best example (or clearest reason why you would want this) for a use case for this type of authenticating service would be if you created an API and want to have a way for third parties to access your API (for instance, on a user’s behalf).