How are binary digits related to bits of information?

The term bit is a contraction of "binary digit" and serves as the fundamental unit of information in information theory and digital computing.12

In the binary number system, information is represented by two mutually exclusive states, typically symbolized as 0 and 1. A bit represents the amount of information gained by making a choice between these two alternatives—such as "on" or "off," "yes" or "no," or the presence versus the absence of an electrical pulse.1342

Because digital devices operate using these two-state binary systems, bits are used to encode complex data, including numbers, characters, and operations. For example, a single bit can distinguish between two possibilities, while combinations of bits allow for the representation of larger sets of data; a sequence of eight bits, known as a byte, can represent 256 distinct values. By grouping these binary digits, computers can process and store virtually any form of information.34