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I'm curious why the Bluetooth is required?

Requiring WiFi makes (so the phone/computer is on a network and can communicate with the other devices), but what's the benefit of Bluetooth? Does it only work when the phone and computer are near each other?

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Bluetooth is used to discover peers and to initiate communication. Thus handoff works even on a wifi network that blocks broadcasts. It even works when no wifi network is present, by setting up an ad hoc network for the connection. (Disclaimer: This is all I know. The details seem rather murky, as handoff is a proprietary Apple protocol.)

The requirements are here: https://support.apple.com/en-au/HT209455

Turning off Bluetooth or wifi may be one of the more common reasons it doesn’t work. Some people never do that, but others do.

Yes.

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