A quick explanation.
You know a hard edge is when the edge of an object is painted in a well defined way, you have no trouble distinguishing the edge, effectively loosing the edge.
You know a soft edge is an edge which is diffused and blending into the surrounding area, fading into the background.
What you want to know is why we use these edges.
Because, edges are used to lead the viewer's eye around your painting and ultimately to the focal point, or focal area.
Hard edges bring the object into focal point. We use a hard edge when we want to make a certain feature appear to advance. It is a good idea to avoid excessive use of hard edges, because they work against the creation of realism, and the painting tends to become mechanical. We need to be careful though, because a painting totally devoid of hard edges tends to look uninteresting. So the solution, is to put in a few hard edges in, but not too many.
Soft edges, and lost edges have the opposite effect. In real life, most edges look soft because our eyes are constantly moving, which has the effect of blurring edges. An edge will only assume its sharpness if we specifically focus on it because when we focus, the eye comes to rest. So in your painting, it is best to keep most of the edges soft, except for those areas you want to stand out and grab attention. The viewers eye has a natural tendency to fill in the lost edge, and this helps keep a painting interesting as well. To paint soft edges, you do exactly that, soften the edge. To paint a lost edge, you paint the edge in the same value as the edge next to it, so that both edges blend in, and get lost.