Light Emitting Diodes work by sending electrons across an energy gap. When the component is switched on and a current flows through it, electrons pass through an "electron hole"; an area in an atom or atomic lattice where an electron could be, but isn't. The electron is captured and subsequently releases an energy burst in the form of photons (light particles). The color of the LED is determined by the energy gap between the flow of electrons and the hole; the greater the gap, the more energy is released, and the bluer the light is.
Basic structure of the LED
In February 1963, less than a year later, Holonyak told Reader's Digest that he imagined the LED would one day replace light bulbs entirely. It has taken a few decades, but the world has caught on, and as wide spread as the LED already is, it seems they are bound to spread more: The days of traditional lighting are numbered. IKEA recently announced that by 2016, they would only stock LEDs; this follows a trend of many nations beginning to outlaw the traditional filament light bulb.