As I understand it, Echo has a very rudimentary speech recognition for its wake words built-in to the hardware. It will try to recognize the wake words: Alexa, Echo, Computer, or Amazon. Because the built-in speech recognition isn't very good (it is limited by the Echo hardware), it will ask the Amazon cloud servers to confirm that the correct wake word was spoken. Amazon's cloud servers are far more powerful than the Echo hardware. While it's doing that, to save time, it is also streaming any words you say after the wake word to Amazon's cloud server. Once the Amazon cloud servers determine that you in fact did say the wake word, then it starts to process all the words you said. But if the Amazon cloud servers determined that you did not say the wake word, the entire recording is discarded and that's the end of that. That's why the blue ring will light up briefly when words that sound like the wake word is spoken.