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In laypersons speak, Bluetooth is a technology or protocol that allows to devices to talk to each other without wires. It is encrypted and therefore secure.

Bluetooth wireless technology is a short-range communications system intended to replace the cables connecting portable and/or fixed electronic devices. The key features of Bluetooth wireless technology are robustness, low power, and low cost.

The Bluetooth Core System consists of an RF transceiver, baseband and protocol stack. The system offers services that enable the connection of devices and the exchange of a variety of data classes between these devices.

Want a more technical explanation?

Radio

The Bluetooth RF (physical layer) operates in the unlicensed ISM band at 2.4GHz. The system employs a frequency hop transceiver to combat interference and fading, and provides many FHSS carriers. RF operation uses a shaped, binary frequency modulation to minimize transceiver complexity. The symbol rate is 1 Megasymbol per second (Msps) supporting the bit rate of 1 Megabit per second (Mbps) or, with Enhanced Data Rate, a gross air bit rate of 2 or 3Mb/s. These modes are known as Basic Rate and Enhanced Data Rate respectively.

Radio Channel

During typical operation, a physical radio channel is shared by a group of devices that are synchronized to a common clock and frequency hopping pattern.

Piconet Consists of Master and Slave Devices

One device provides the synchronization reference and is known as the master. All other devices are known as slaves. A group of devices synchronized in this fashion form a piconet. This is the fundamental form of communication for Bluetooth wireless technology.

Frequency Hopping and Adaptive Frequency Hopping (AFH)

Devices in a piconet use a specific frequency hopping pattern which is algorithmically determined by certain fields in the Bluetooth specification address and clock of the master. The basic hopping pattern is a pseudo-random ordering of the 79 frequencies in the ISM band. The hopping pattern may be adapted to exclude a portion of the frequencies that are used by interfering devices. The adaptive hopping technique improves Bluetooth technology co-existence with static (non-hopping) ISM systems when these are co-located.

Time Slots and Packets - Full Duplex Transmission

The physical channel is sub-divided into time units known as slots. Data is transmitted between Bluetooth enabled devices in packets that are positioned in these slots. When circumstances permit, a number of consecutive slots may be allocated to a single packet. Frequency hopping takes place between the transmission or reception of packets. Bluetooth technology provides the effect of full duplex transmission through the use of a time-division duplex (TDD) scheme.