The Sages instituted making a berakha over a candle on Saturday night, to commemorate God’s granting Adam the insight to strike two stones together to produce fire.
Ideally, one makes the berakha over an avuka (lit., “torch”), that is, a braided candle that has at least two wicks. Since its flame has two sources, its light is great. If one does not have a braided candle, he may light two matches, which can also be considered an avuka. Be-di’avad, if there is no alternative, one may recite the berakha over a candle with only one wick (SA 298:2).
The candle must be bright enough that even without an electric light, one could use it to distinguish between different coins. The custom is to ensure this by looking at the lines in one’s palm and at the base of the fingernails; this is considered a good omen (SA 298:3-4).
Those who hear havdala also need to see the candlelight. One who is standing far away should move closer so that he may benefit from the light – close enough for him to see the lines in his palm and the base of his fingernails. One who heard havdala but did not see the flame has fulfilled his obligation of havdala but has not fulfilled the mitzva to thank God for fire. It is a mitzva for him to light a candle and recite the berakha of “borei me’orei ha-esh” (MB 297:13; 298:13). If he saw the flame but was not close enough to make out the lines on his palm, he should not make the berakha again, since some maintain that he fulfilled his obligation by seeing the candle (Orĥot Ĥayim quoted by Beit Yosef 298:4; Kaf Ha-ĥayim 298:22).
Those who beautify the mitzva turn off the electric light when reciting the berakha over the candle, so that the benefit they derive from the candlelight is evident, and so that even those who are standing far away will be able to see the lines of their palms by its light (see SSK 61:33).
One may make the berakha only over a candle that was lit to provide light, not over a candle lit to honor someone or something. For example, one does not make the berakha over a yahrzeit candle or over the candles placed in front of the ĥazan in in the synagogue, because those are candles that are lit for honor, not to provide light (MB 298:30).
Some Aĥaronim made the berakha of Me’orei Ha-esh over an electric light bulb, since electricity has the status of fire. However, many maintain that one should not make the berakha over an electric bulb because it is not considered fire; fire requires oxygen, and there is no oxygen in electric bulbs, only a heated metal filament. Furthermore, even if an electric light bulb can be considered fire, one should not make the berakha over fire covered by glass. Since this berakha was established to remind us of the fire that Adam produced on Saturday night, it must be similar to that fire – open, without a glass cover.