Li-Fi is a technology that uses light from LED bulbs to transmit data wirelessly. It works by varying the intensity of light faster than the human eye can detect, allowing binary data to be encoded and transmitted similar to Wi-Fi but using visible light instead of radio waves. The technology was pioneered in the 1990s but recent demonstrations have achieved speeds over 100Mbps. Potential applications of Li-Fi include use in traffic lights, airplanes, underwater and public internet hotspots provided through street lamps. However, challenges include light not passing through solid objects and interference from other light sources.