Li-Fi is a wireless optical networking technology that uses light-emitting diodes (LEDs) for data transmission. It provides high-speed communication in a similar way to Wi-Fi but uses light rather than radio waves. Li-Fi has advantages over Wi-Fi in terms of capacity, security, and availability. It works by modulating the intensity of light from an LED to transmit data and a photodiode is used as the receiver. While Li-Fi does not penetrate walls and requires line of sight, it has applications in areas like underwater communications, hospitals, and providing internet access from street lights.