An .svg (Scalable Vector Graphics) is the most common type of cut file. Die cutting machines like the Silhouette Cameo or Cricut Explore Air 2 use them to determine how to cut materials.  A cut file is a digital file that contains a blueprint of sorts.  It is a set of lines that tells a machine where and how to cut and image.  It's how people create decals, cards with punch out holes, custom stickers, vinyl for shirts and more.  The possibilities are endless.