The Crow's Nest is a station located at the top of a ship's mast, where a player can act as a lookout for other ships, seafaring hazards, or locations.
Since the Anniversary Update, ship Masts can suffer damage and break down, making it possible for Gunpowder Barrels placed on the Crow's Nest to inflict serious damage to the rest of the ship. Fire can also spread up the Masts and blow any Gunpowder Barrels nested there. Crow's Nests are also favoured by sneaky pirates for tucking on an enemy player's ship, often using Emotes to stay out of sight.
This is not to be confused with the Crow's Nest Fortress, which shares the same name.