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Picture of a capsule
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Capsule endoscopy is a way to record images of the digestive tract for use in medicine. The capsule is the size and shape of a pill and contains a tiny camera. After a patient swallows the capsule, it takes pictures of the inside of the gastrointestinal tract. The primary use of capsule endoscopy is to examine areas of the small intestine that cannot be seen by other types of endoscopy such as colonoscopy or esophagogastroduodenoscopy (EGD). The technique was invented in Japan. It was approved by the U.S. Food and Drug Administration (FDA) in 2001. In early 2014, FDA approved a new swallowable pill camera, 'PillCam Colon' by Given Imaging from Israel, which takes high-speed photos over an 8 hour tour in the innards and transmits the images to a receiver on a belt.
Capsule endoscopy is used to examine parts of the gastrointestinal tract that cannot be seen with other types of endoscopy. Upper endoscopy, also called EGD, uses a camera attached to a long flexible tube to view the esophagus, the stomach and the beginning of the first part of the small intestine called the duodenum. A colonoscope, inserted through the rectum, can view the colon and the distal portion of the small intestine, the terminal ileum. These two types of endoscopy cannot visualize the majority of the middle portion of the gastrointestinal tract, the small intestine. Capsule endoscopy is useful when disease is suspected in the small intestine, and can sometimes diagnose sources of occult bleeding [blood visible microscopically only] or causes of abdominal pain such as Crohn's disease, or peptic ulcers. Capsule endoscopy can be used to diagnose problems in the small intestine, but unlike EGD or colonoscopy it cannot treat pathology that may be discovered. Capsule endoscopy can use bluetooth to transfer the captured images. A transmitted radio-frequency signal can be used to accurately estimate the location of the capsule and to track it in real time inside the body and gastrointestinal tract.
Common reasons for doing Capsule Endoscopy include unexplained bleeding, unexplained iron deficiency, unexplained abdominal pain, search for polyps, ulcers and tumors of small intestine and inflammatory bowel disease such as Crohn's disease.
It is considered very safe method to determine unknown cause of Gastrointestinal bleed.  Capsule usually passes through feces within 24-48 hours.  But there has been a report of retention of video capsule almost for 5 years. However, patient was asymptomatic with retention of capsule. 
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