What are Iron nuggets and what can they be used for?

An Iron Nugget is a craftable, renewable, non-placeable item. It has a texture resembling that of the Gold Nugget, recolored and turned 90° to the left, to prevent mistaking the item as a Ghast Tear. Its ID is minecraft:iron_nugget.

There are only two methods to obtain Iron Nuggets:

1. Crafting an ingot to get 9 nuggets.
   

2. Smelting any iron tool or any iron or chain armor, including horse armor, obtains a single nugget.
   

There are four other recipes involving Iron Nuggets as a component: Iron Ingots, Chains, Lanterns and Soul Lanterns:

Image source: Minecraft Wiki

The iron nugget is something you can obtain from smelting any iron materials:

Then, if you have 9 iron nuggets, you can craft an iron ingot:

I don't know why you would, but you can actually craft an iron ingot into nuggets too, if you just put an iron ingot into a square of the crafting table: