Link Baiting is creating content that suits up the interest of people so that you can get maximum inbound or backlinks.
If you know your audience well, you write a content that naturally gets more attention. More people will love to connect your content with theirs, thereby, increasing the traffic on your website.
As far as creating link baits is considered, it is more of an art rather than just writing. You need to research, analyse and engage with your audiences to create useful bait links.