What is Whois and why is privacy protection important?

What is the Whois System?
The WHOIS system is in place to ask the question,“Who is responsible for this domain or IP address?” Every domain that is registered must have a public record of the person or organization who registered it (aka, the registrant). That record includes (among other things) the name, address, telephone number and email address of the domain’s registrant.
Why is Whois Privacy Protection important?
Unscrupulous types — like spammers and identity thieves — can gain access to your contact details just by looking up your domain name on any WHOIS look-up website. There are even services out there that watch for and list new domain registrations, which makes it that much easier for such people to find potential targets.
To combat the negatives that can happen when your private information is published, registrars usually offer an optional WHOIS privacy service (Privacy Protection). Which allow the registrar to act as a proxy of the registrant. They publish the proxy contact information on the WHOIS directory, and keep the registrant’s information private. Although Privacy or ID protection usually costs a little extra (around $3-$4 per year), it is well worth it.
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