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When a Bluetooth unit connects to one or more devices, the resulting network is referred to as a piconet. Derived from the prefix "pico-" (one-trillionth; essentially, "tiny") and the word 'network,' piconets are sometimes referred to as "personal area networks (PAN)."

Within a piconet, the main Bluetooth-controlling unit (headset, et cetera) is referred to as the master. Any and all devices connected to the master are referred to as slaves. A master can establish a piconet with a single device (such as a headset and a phone or a wireless speaker system and a laptop) or expand their piconet to include multiple devices through the use of Multipoint. Multipoint, available from Bluetooth version 2.0 + EDR forward, enables users to connect up to seven active slave units (exactly the number of maximum units depends on the specific Bluetooth master) within range. Piconets can also include data for a larger number (over 200) of inactive slave units.

When a piconet is established, the master unit sends a packet of information known as a "frequency-hop synchronization" packet (FHS) to the slave unit, establishing the rate and specific frequencies from which the master will send information. The FHS packet also helps synchronize all the clocks within the piconet, like criminals in a heist film, for the duration of the piconet, so data transfer can be timed perfectly. By perfectly synchronizing all the actions within a piconet, the FHS packet is ensuring that multiple piconets can exist in the same space without interfering with each other.

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