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The `sed` command is primarily a stream editor used for making substitutions and replacements in text files. For example, given a file with key-value properties, one can utilize the `set` command to read the file and replace spaces with commas. By default, `sed` replaces only the first space with a comma on each line. However, appending the `g` flag allows it to replace all spaces globally. While `sed` is not ideal for replacing new lines, it can still achieve this due to its powerful functionality and versatility in text manipulation.