Hadoop is a scalable distributed system for storing and processing large datasets across commodity hardware. It consists of HDFS for storage and MapReduce for distributed processing. A large ecosystem of additional tools like Hive, Pig, and HBase has also developed. Hadoop provides significantly lower costs for data storage and analysis compared to traditional systems and is well-suited to unstructured or structured big data. It has seen wide adoption at companies like Yahoo, Facebook, and eBay for applications like log analysis, personalization, and fraud detection.