Almost all bacon (at least British, North American and Northern European bacon) used to be smoked to help preserve it. People came to like the smoky taste in its own right, and in a way, the preservation aspect (while of course still important if they were going to be able to have bacon around) came to be a side benefit of the smoking process!
Bacon, like all smoked meat or fish products, is cured with salt first before it is smoked. Not all bacon that says "smoked" has been smoked, though. Some might be flavoured with liquid smoke in order to reduce the production cost and make it more affordable to the consumer. To know if your bacon's been anywhere near a real fire, try seeing if somewhere on the label it says it has been smoked over a particular kind of wood.
Strips of Smoked Bacon are very good as a cooking ingredient: for wrapping around lean meats, or around veg such as asparagus or eggplant. They add amazing flavour to almost any savoury dish.
Smoked BaconSmoked Bacon
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Smokey Bacon; poitrine fumée (French); Bacón ahumado, Tocino ahumado (Spanish); Toicinho fumado (Portuguese)