This IP address is 127.0.0.1 is an IPv4( Internet Protocol Version-4) address called localhost. Every computer uses this address as their own and doesn’t let other devices communicate.
You probably know that every device has its own IP address(Eg 192.168.2.208) so that it can communicate with a router. However, it still has this special 127.0.0.1 address attached to it to means “this computer” It is also called loopback address. So basically in your computer, there is a local server which is called localhost.
How is it important to Hackers?
In computer networking, theIP address is guaranteed to be on every networked computer. Since that address is on every machine, it is just like home. Always there, safe, and local. 127.0.0.1 is the localhost which is the ‘home’ network on a PC. Basically, it is the home for all your network testing and PHP/HTML coding. So if the hacker wants to attack some system then he can first try on his own home network. Attacking another network directly means you are also attacking the web server. Other uses of this are to trick computer security into attempting to crack, test network speed or attack by using the 127.0.0.1 address.
So keep Calm and hack 127.0.0.1!