Bluetooth is a communication protocol. It is a like a language that devices use to wirelessly communicate between each other. It is in fact based on a Master/Slave operation format. Pico net is a term used to describe a network formed by one device and all other devices detected in its range. In single coverage are around 10 Pico nets can co-exist. A master can connect to more than one slave simultaneously. In reality, the master keeps switching between slaves. Bluetooth links two Pico nets to form a larger network. This works over a short range and can be used to establish connections between PDAs, mobile phones, laptops, digital cameras, printers, scanner, and many other electronic gadgets.
Establishing a connection using Bluetooth is a complicated process. Initially, the device stays in a "Passive state", i.e. it is just in contact with the network, but not performing any activity. Next the connection establishment process begins with the inquiry process. "Inquiry" is a request sent by the master to all the devices found in its range. Whichever devices receive this inquiry send a response with their respective addresses. Now the master chooses one address and synchronises with its access point. This process known as the "Paging technique" involves alignment of its clock and frequency with that of the access point.
Next in line is the "Service Discovery" phase, wherein a link is established and the master device enters the access point using the Service Discovery Protocol. As a result of linking, a "Communication Channel" is to be created. Sometimes the access point may include a security mechanism and you may need to know the encryption key or in common terms the PIN. Once the PIN is sent and received and confirmed a communication is established. Finally the master and slave can use the communication channel to transfer data and information.
Thus Bluetooth is neither a broadband nor a long distance networking technique. It is a Personal Area Networking technology that can be used in a number of important applications. First of all, Bluetooth technology uses the same frequency range as the Wi-Fi system. It only requires a careful coordination of the various frequencies with the perfect transmit and receive timings between various devices. Finally, the enhanced version of Bluetooth is expected to use Ultra-Wide Band frequencies that contributes increased data rate and improved signal strength.