How is wifi used to detect network location?

I'll try to keep it simplified. Every router puts off a beacon. This beacon contains unique identifiable information, namely the MAC address of the broadcasting device.

Now assume there are a billion people with phones and their phone's software asks to use wifi to improve GPS. What do you think is happening? Well if billions of people have this feature enabled we can assume that any wireless router they drive by is scanned, logged, and uploaded to a server where that data can be tweaked and compared with other data and create a mapping system of where routers are located. Since most routers have a range of 30-100 meters this can be used to help narrow down a range. On top of that, your phone also gets a signal strength from the beacon. Even more, you can also see other wireless devices, including cell phones, with their signal strength. This can all be used and be converted to an actual lat/long position and therefore would supplement actual GPS satellite numbers. This means faster results on your GPS and a little better accuracy.

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