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Nitrogen is important because it is a key building block of amino acids and thus proteins and living things. It acts as a fertilizer. During a thunder storm lightning converts some nitrogen to more soluble forms and when it rains it thus acts as a natural nitrogenous fertilizer.

Also, if all the atmosphere was oxygen, this would create a very flammable situation. The nitrogen which is almost inert thus "dilutes" the oxygen. Even in a hospital when someone has breathing diffficulty, they use 50% oxygen 50% air rather than pure oxygen.

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