The heat-shrink plastic protects your wire from cuts and debris to prevent short circuits, while the pin inserts snugly into the tiny opening of your terminal block or other connection point for a solid hold. In addition to a protective seal, the heat shrink distributes strain when the wire is tugged or under tension for long periods. Use a crimping tool to squeeze the wire evenly into the barrel, where it touches the pin to establish conductivity. Then apply heat to seal the plastic onto the wire from all sides.