A capsule is a nested set of neural layers. So in a regular neural network, you keep on adding more layers. In a capsule network you would add more layers inside a single layer. Or in other words, nest a neural layer inside another. The state of the neurons inside a capsule capture the above properties of one entity inside an image. A capsule outputs a vector to represent the existence of the entity. The orientation of the vector represents the properties of the entity. The vector is sent to all possible parents in the neural network. For each possible parent, a capsule can find a prediction vector. Prediction vector is calculated based on multiplying its own weight and a weight matrix.
Whichever parent has the largest scalar prediction vector product, increases the capsule bond. Rest of the parents decrease their bond. This routing by agreement method is superior to the current mechanism like max-pooling. Max pooling routes based on the strongest feature detected in the lower layer. Apart from dynamic routing, CapsNet talks about adding squashing to a capsule. Squashing is a non-linearity. So instead of adding squashing to each layer like how you do in CNN, you add the squashing to a nested set of layers. So the squashing function gets applied to the vector output of each capsule.
News on Capsule Networks
Here are some news articles related to capsule networks.