Unless you verify who you are talking to, having an encrypted channel won't provide you confidentiality or integrity. Not checking the SSL certificate of a remote server you are communicating with allows anyone with control of the network to stand up their own server and certificate, impersonating your server.

Self signed certificates are certificates that are not signed by a trusted authority, in other words - no "trusted" third party has vouched for these certificates. These certificates should never be trusted without explicitly verifying that the certificate of the remote server is the server you intend to communicate with. Certificates signed by a certificate authority can be verified by ensuring that a trusted certificate authority signed that certificate. When you need to communicate with a specific server, you'll want to ensure that your client is set to only trust certificate the server is presenting, rather than any certificate signed by a certificate authority. When you have many users who will use standard software you do not have control of (for example, a web browser), you'll want to submit a certificate signing request to a certificate authority to obtain a proper certificate.

openssl genrsa -out server.pem 4096
openssl req -new -x509 -key server.pem -out cert.pem -days 30

Sample output:

[user@localhost testcase]$ openssl genrsa -out server.pem 4096
Generating RSA private key, 4096 bit long modulus
....................................................................................++
...........................++
e is 65537 (0x10001)
[user@localhost testcase]$ openssl req -new -x509 -key server.pem -out cert.pem -days 30
You are about to be asked to enter information that will be incorporated
into your certificate request.
What you are about to enter is what is called a Distinguished Name or a DN.
There are quite a few fields but you can leave some blank
For some fields there will be a default value,
If you enter '.', the field will be left blank.
-----
Country Name (2 letter code) [XX]:US
State or Province Name (full name) []:Washington
Locality Name (eg, city) [Default City]:Seattle
Organization Name (eg, company) [Default Company Ltd]:Check That Cert
Organizational Unit Name (eg, section) []:Testcases
Common Name (eg, your name or your server's hostname) []:localhost
Email Address []:[email protected]
[user@localhost testcase]$ 

openssl s_server -tls1 -tls1_1 -tls1_2 -key server.pem -cert cert.pem -www

The hostname (or CN) is a commonly accepted way of identifying the name of the system you are communicating with. In the event that an attacker redirects your traffic to another system trusted by client, validation of the hostname will prevent the transport from operating to the incorrect service.

Failure to check the certificate means your client will communicate with any server using that transport. If you send secrets over the channel, it is trivial for an attacker with the ability to redirect network traffic to read them.

The more certificates and certificate authorities you trust, the higher the chance of your transport being intercepted. Limit the parties you trust and review them frequently to ensure you still trust them.