Bluetooth is a wireless technology standard that allows short-range exchange of data between fixed and mobile devices over short distances using radio transmissions. It was originally developed in 1994 as a cable replacement technology. The Bluetooth specifications have evolved through several versions with improvements in speed and functionality. Bluetooth devices operate within piconets, and multiple piconets can be interconnected to form scatternets. The Bluetooth protocol stack includes various layers like the radio, baseband, link manager, and L2CAP layers to manage connections and transfer of data packets. Bluetooth provides advantages like wireless connectivity and ease of use but also has limitations such as short range and potential security issues.