What is the difference between pipes and sockets? Why does Unix use pipes for interprocess communication?

Both pipes and sockets handle byte streams, but they do it in different ways…
pipes only exist within a specific host, and they refer to buffering between virtual files, or connecting the output / input of processes within that host. There are no concepts of packets within pipes.
sockets packetize communication using IPv4 or IPv6; that communication can extend beyond localhost. Note that different endpoints of a socket can share the same IP address; however, they must listen on different TCP / UDP ports to do so.
Usage:
Use pipes:when you want to read / write data as a file within a specific server. If you’re using C, you read() and write() to a pipe.
when you want to connect the output of one process to the input of another process… see popen()
Use sockets to send data between different IPv4 / IPv6 endpoints. Very often, this happens between different hosts, but sockets could be used within the same host
BTW, you can use netcat or socat to join a socket to a pipe.

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