When do we need curly braces around shell variables?

In this particular example, it makes no difference. However, the {} in ${} are useful if you want to expand the variable foo in the string

"${foo}bar"

since "$foobar" would instead expand the variable identified by foobar.

Curly braces are also unconditionally required when:

• expanding array elements, as in ${array[42]}
• using parameter expansion operations, as in ${filename%.*} (remove extension)
• expanding positional parameters beyond 9: "$8 $9 ${10} ${11}"

Doing this everywhere, instead of just in potentially ambiguous cases, can be considered good programming practice. This is both for consistency and to avoid surprises like $foo_$bar.jpg, where it's not visually obvious that the underscore becomes part of the variable name.

Variables are declared and assigned without $ and without {}. You have to use

var=10

to assign. In order to read from the variable (in other words, 'expand' the variable), you must use $.

$var      # use the variable
${var}    # same as above
${var}bar # expand var, and append "bar" too
$varbar   # same as ${varbar}, i.e expand a variable called varbar, if it exists.

This has confused me sometimes - in other languages we refer to the variable in the same way, regardless of whether it's on the left or right of an assignment. But shell-scripting is different, $var=10 doesn't do what you might think it does!

You use {} for grouping. The braces are required to dereference array elements. Example:

dir=(*)           # store the contents of the directory into an array
echo "${dir[0]}"  # get the first entry.
echo "$dir[0]"    # incorrect

You are also able to do some text manipulation inside the braces:

STRING="./folder/subfolder/file.txt"
echo ${STRING} ${STRING%/*/*}

Result:

./folder/subfolder/file.txt ./folder

or

STRING="This is a string"
echo ${STRING// /_}

Result:

This_is_a_string

You are right in "regular variables" are not needed... But it is more helpful for the debugging and to read a script.