We’ve long had the ability to use an iPhone’s mobile network connection to connect to an iPad or a Mac to the internet. However, Personal Hotspot works a little differently in iOS 8 than it did in previous versions. Like the other parts of Continuity, it relies on your iCloud account to verify that you’re the owner of both devices, so as long as your iPhone, Mac and/or iPad are signed into to the same iCloud account, you won’t need to type in a password.
There are three ways to share an iPhone’s internet connection: over Wi-Fi, Bluetooth and USB. The latter offers the fastest connection and lowest battery usage, but Wi-Fi is the simplest to use. Switch on Personal Hotspot in your iPhone’s Settings app, and select the iPhone in your Mac or iPad’s Wi-Fi menu.