The version number of a release is a key indicator of whether it’s compatible with existing code.
Semantic versioning is a popular approach used by Drupal core, and many contributed modules, themes and distributions.
It uses version numbers like 1.0.0 to show the major, minor and patch versions.
If the second or third number changes, e.g. 1.1.0 or 1.0.1, the release contains new backwards-compatible features or fixes, so it’s safe to update.
If the first number changes, e.g. 2.0.0, the release is not backwards compatible and contains breaking changes that you’ll need to review and update your code accordingly.