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As I have seen till now every device having a Wi-Fi card has been able to act as a Wi-Fi Access Point.
So is a Wi-Fi AP just software managing a Wi-Fi NIC to act as an AP?
If yes, then what does the software do in detail to act as a Wi-Fi AP?

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A wireless radio can either send or recieve wireless data. A hotspot device does both and is the bridge to the internet. A device that has support for 802.11N can in theory act as this bridge, in the case of Windows the supports exists by default, in the case of a phone operating system it has to be added or at least enabled. Clearly the device with the 802.11N support also recieves data and sends data it simply does not act as a networking bridge. –  Ramhound May 23 '12 at 11:26

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You are correct, but the "wifi card" needs to support functioning as an access point, which is something most wifi devices for laptops and desktops don't support.

The Guruplug is an ARM-based "plug computer" with 512MB of RAM and a device that can act as a wireless router or "hotspot" - it seems similar to most cell phone hardware to me.

I was expecting the wireless NIC to support "monitor mode" (which brings every wireless packet "heard" by the radio to the OS) and then one would need such software as hostapd to turn it into an access point. However, the way it works on the plug is that the wireless NIC appears to the operating system (Linux) as just another network interface.

The firmware on the NIC (which is loaded when the driver is initialized) handles encryption and multiple clients. It came with a utility that allowed you to set the parameters of the wireless NIC, and the parameters you can set with this utility are all the same as any wireless router you would buy at a retail store. This utility (uaputl) just sends ioctl's to the wireless NIC driver. So the OS doesn't need to be concerned with any of the access point details, but is still responsible for firewalling, DHCP, and routing. In this instance there are commands you can send via uaputl to start and stop the access point.

By uploading different firmware the wireless NIC can be a "client" or associate with an access point like standard Wifi hardware.

So basically the wireless NIC, with access point capability, is merely exposed as another network interface to the operating system. I really imagine most hotspots are very similar.

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It really depends on your definition.

A cafe can have a wireless hotspot that is no more than a regular home internet connection with a router that has security set to off (or on and shared between customers).

There isn't really much difference to a public wifi than private... What I think you are really asking about is "extras" that make public wifi more interesting.

To understand this, you really need to know a bit more about networking... To reach a destination (internet) outside of your local network (cafe), you need to go through a gateway (router).

Typically routers do not do much more than just route - but, for what I think you want, you would enable wireless isolation so clients can not communicate directly with each other (easily), and then you would also look at something such as a "captive portal".

Captive portal is by far the biggest thing people think of when talking about "hotspots". this typically has a list of MAC Addresses, intercepts any request and allows you to redirect to your own webpage where you can have your own custom logic - this is usually either a place to type information, prepaid card info or pay by card - then you would have something that allows the device to the MAC Address list so that internet can work like normal.

Again, there are many variations and definitions - but, I hope this helps!

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