Bluetooth is a wireless connection technology that allows you to connect several devices in your home. Like Wi-Fi, you can use Bluetooth to exchange files and operate electronics. Wireless headsets, cellphones and even gaming consoles can all use Bluetooth in one way or another. While Bluetooth has certain limitations, such as a shorter range and lower bandwidth then Wi-Fi, it can make connectivity between devices in your home more reliable than other wireless alternatives.
Setting up a Bluetooth connection between two devices is quick and easy. The exact interface for doing so varies depending on your devices, but to connect two devices you need make one discoverable while the other one scans. Once the scanning device finds the discoverable one, you initiate the connection and enter the PIN as directed by your user's manual. That's all there is to it. You shouldn't have to reconnect the devices once they've been paired.
A Bluetooth headset is compatible with any other device that supports Bluetooth, regardless of make, model or design. You can use it with your mobile phone or pair it with your gaming console or computer for easy chatting online. Your Bluetooth keyboard can work wtih your computer and your PlayStation. The only issue you're likely to encounter is if the device in question can only pair with a limited number of devices.
Obviously the lack of wires is a benefit of Bluetooth, but it's even less bulky than Wi-Fi. To create a wireless network in your home using Wi-Fi you will need a router to set up the access point. All communication between two devices on a wireless network must go through your wireless router. With Bluetooth, the devices speak directly to one another. As long as your devices already have Bluetooth enabled, you do not need any additional hardware to connect them. If you do need extra hardware, it's in the form a small USB dongle that adds Bluetooth connectivity to your computer or device.
Bluetooth has inherent security in two ways. The first is that it is not always broadcasting, unlike a Wi-Fi connection. When you want to connect two devices via Bluetooth you set them to be visible, also sometimes called "discoverable." This visibility is only necessary until the devices have been paired. Once paired, you can turn off visibility and keep the device closed to new connections. The second level of security is that in most cases you will need to authorize the connection using a PIN or code to connect two devices. For instance, if you have your laptop's Bluetooth set to discoverable, a stranger still can't connect to your computer until you approve the connection manually. Finally, the shorter range of Bluetooth devices means that users outside your home are unlikely to even see your Bluetooth device.
Source from: http://smallbusiness.chron.com/advantages-using-bluetooth-existing-technology-32921.html