Wireless Access Point Vs. Ad Hoc Network
Some people confuse wireless Access Points with Wireless Ad Hoc networks. An Ad Hoc network uses a connection between two or more devices without using a wireless access point: the devices communicate directly when in range. An Ad Hoc network is used in situations such as a quick data exchange or a multiplayer LAN game because setup is easy and does not require an access point. Due to its peer-to-peer layout, Ad Hoc connections are similar to Bluetooth ones and are generally not recommended for a permanent installation.
Internet access via Ad Hoc networks, using features like Windows' Internet Connection Sharing, may work well with a small number of devices that are close to each other, but Ad Hoc networks don't scale well. Internet traffic will converge to the nodes with direct internet connection, potentially congesting these nodes. For internet-enabled nodes, Access Points have a clear advantage, with the possibility of having multiple access points connected by a wired LAN.
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