Optical fibers transmit light and operate based on the principles of total internal reflection. They consist of a core and cladding material, with the core having a higher refractive index. This allows light to be guided along the fiber due to total internal reflection at the core-cladding boundary. There are two main types of optical fibers - single-mode fibers which only allow one mode of light to propagate, and multi-mode fibers which allow multiple light modes. Dispersion and attenuation are two factors that limit the performance of optical fibers by causing light pulses to broaden as they travel along the fiber.