Bluetooth beacons are similar to Wi-Fi networks – they transmit radio waves within a set range (up to 70 meters). The device repeatedly broadcasts a radio signal, which can be seen by other devices within its range.
The radio signals the beacon transmits are composed of numbers and letters which are transmitted at regular intervals (approximately 1/10th of a second). When a Bluetooth-enabled device, like a smartphone, is in the range of the transmitting device, it can see the beacon.
This is similar to lighthouses that permanently emit visible light which serves as navigational guides for sailors.