Advantages of a temporary Database in SQLite

I read about the keyword ":memory:" from a book on SQLite today but it only says what it is and how to use and the explanations were too short. So I searched for more information here, but couldn't get SQLite specific info.

1. What advantages does ':memory:' mode have? (When do I need this?)

2. Temporary database's performance is faster?

3. Do I still need to use transactions on a temporary database?