Five electrical and computer engineering students at Northeastern University have designed a low-cost human-computer interface device that has the ability to track the position of a user's hand in three dimensions. Physical contact is not required and the user does not need to hold a controller or attach markers to their body. You simply wave your hand over the device to control the computer.
The video shows visual feedback applications in the beginning, 3d manipulation capabilities in the middle, and a brand new type of 3-dimensional musical controller.
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Of course, there have been other research and engineering works in this 3D capacitive sensing field, for example,