We present a low-cost 3D tracking system for virtual reality, gesture modeling, and robot manipulation applications which require fast and precise localization of headsets, data gloves, props, or controllers. Our system removes the need for cameras or projectors for sensing, and instead uses cheap LEDs and printed masks for illumination, and low-cost photosensitive markers. The illumination device transmits a spatiotemporal pattern as a series of binary Gray-code patterns. Multiple illumination devices can be combined to localize each marker in 3D at high speed (333Hz). Our method has strengths in accuracy, speed, cost, ambient performance, large working space (1m-5m) and robustness to noise compared with conventional techniques. We compare with a state-of-the-art instrumented glove and vision-based systems to demonstrate the accuracy, scalability, and robustness of our approach. We propose a fast and accurate method for hand gesture modeling using an inverse kinematics approach with the six photosensitive markers. We additionally propose a passive markers system and demonstrate various interaction scenarios as practical applications.