Li-Fi and Wi-Fi are quite similar as both transmit data electromagnetically. However, Wi-Fi uses radio waves while Li-Fi runs on visible light.
As we now know, Li-Fi is a Visible Light Communications (VLC) system. This means that it accommodates a photo-detector to receive light signals and a signal processing element to convert the data into 'stream-able' content.
An LED lightbulb is a semi-conductor light source meaning that the constant current of electricity supplied to an LED lightbulb can be dipped and dimmed, up and down at extremely high speeds, without being visible to the human eye.
For example, data is fed into an LED light bulb (with signal processing technology), it then sends data (embedded in its beam) at rapid speeds to the photo-detector (photodiode).
The tiny changes in the rapid dimming of LED bulbs is then converted by the 'receiver' into electrical signal.
The signal is then converted back into a binary data stream that we would recognise as web, video and audio applications that run on internet enables devices.