One benefit is that if you don't have access to water close to your garden site you can pack your bike basket full of bottles of water with their original caps on. Then switch to this one when watering.
It's really simple.
You will need:
needle (or nail if you want bigger holes more water flow)
thimble (or hammer if you go with nail size holes)
Tips for other uses are appreciated in the comments section.
Step 1: Find a suitable cap
My suggestion: Find a cap. Yes, go out in the urban jungle and forage. You probably won't have to walk very far before you find a recyclable bottle thrown into a garbage can. Take the cap from it (take the bottle only if you need it, there are probably someone out there who need that recycle-fee better than you. If your country have such a recycling system that is).
You may want to clean the cap before you move on to the next step..