What is hotlink or band width?

The direct linking to a web site's files (images, video ,etc.) is called Bandwidth theft or Hotlinking. For example an img tag to display an image in your site that is originally found in others site.
The amount of data transferred from a web site to your computer is called as the bandwidth. The site's bandwidth will be used when you viewing that site. So the bandwidth will be a great issue since the web hosts charge based on the amount of data transferred.
Bandwidth theft can explained in this way: imagine some stranger using your landline without your knowledge and you are charged for it.

How do I know that I am Hotlinking?

This is the way you will display the image in the HTML on your web page:

img src="image.jpg" height="500" width="500"

This tells you that you are using an image called image. jpg on the same server as that of the others files which you are using in your web page.
When you are Hotlinking an image from outside server the tag will be like this:

img src="http://hotlink.com/image.jpg" height="500" width="500"

This will request for the image (image. jpg) from other server which does not belong to you. Whenever the page gets loaded, the outside server has to use its bandwidth of that site to display that image. To avoid this don't link to files on servers which does not belong to you.

Results of Hotlinking?

Hotlinking can lead to undesirable consequences. It will be a violation of copyrights when you are displaying an image or file which does not belong to you. The owner the file can use DMCA law to shut your site and all your information given for use in legal proceedings.