How does Modbus protocol work and what are its variants?

Modbus is a serial communication protocol using master-slave architecture. Master initiates requests; slaves respond. Data types: coils (discrete outputs), discrete inputs, holding registers (read/write 16-bit), and input registers (read-only 16-bit). Variants: Modbus RTU (binary encoding over RS-485/RS-232), Modbus ASCII (ASCII encoding, slower), and Modbus TCP (over Ethernet, removes CRC, adds MBAP header). Function codes specify operation (read/write single/multiple). Addressing starts at 0 or 1 depending on implementation. Still widely used due to simplicity and interoperability.