This chapter is from the book
1.5 Security
The high speed, pseudo-random frequency hopping algorithm employed in Bluetooth makes it very difficult to listen in on a Bluetooth connection. In fact, the U.S. military considers a communications link using frequency hopping over 79 channels to be secure in itself.
For link encryption and authentication, Bluetooth uses a strong contemporary cipher algorithm available in the public domain called SAFER+, which generates 128-bit cipher keys from a 128-bit plain text input.