The Global Positioning Satellite network, launched in 1978, is a powerful system for navigation that has effectively replaced mankind's use of navigation by constellations. Now, instead of learning a position by relative locations of stars, we have a system that tells us our exact location on earth based on the position of nearby satellites. There are a few devices, such as transceivers and transponders, which use the same network for similar purposes.
Global positioning satellites, or GPS, refer to the system of satellites that transmit a signal. Because the satellites pass across the earth in a constant, predictable manner, these signals can be used to calculate a position. That's where a GPS device comes in: it reads that signal and calculates its global position. Because there's an entire network of satellites in the sky, however, there's a lot more precision and a guarantee that your GPS unit will be able to find at least one satellite anywhere in the world. At any given time, you are likely under between five and eight satellites. It only takes three to calculate position, and four can give you altitude.
Transceiver is a word made up of "transmitter" and "receiver." There are two types of transceivers, generally either fixed or portable. The portable variety are usually less powerful but has the benefit of portability, while the more powerful fixed type are permanently in place. A GPS transceiver is often used to either confirm or back up an existing satellite signal. So, in addition to the five or more satellites that your GPS unit may be picking up on, you may also be able to find a transceiver attached to a physical location on earth.
The word Transponder is a combination of "Transmitter" and "Responder," and as the name suggests a transponder is a device that reads and sends a signal. A transponder on a GPS system not only reads a position on earth from the satellites, but also transmits that signal back. Practically, a transponder could be used to track the location of an object or person, provided that person has the transponder either attached or carried on him.
Despite the amount of precision built into a system like this--the satellites themselves are equipped with atomic clocks capable of measuring time to billionths of a second--commercially available GPS transceivers and transponders are not completely precise. This is because of an intentional amount of decay built into your GPS unit. This is a military effort to prevent enemy forces from getting a device capable of pinpoint accuracy from a local electronics store, and using it for something like missile targeting.
GPS units typically don't work indoors, because most structures block the radio signal from space. If your GPS unit cannot "see" (or more accurately, hear) any of the satellite radio signals, it cannot calculate your position. Most commercial GPS units will assume they are currently in the last location they received signal, so if you move your GPS unit while powered down, it will take longer to locate that signal again.
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