Bits & bytes

A single 1-or-0 is a bit — the smallest possible piece of information. On its own it can’t say much. The power comes from grouping bits together, and the counting explodes faster than intuition expects.

From bit to byte

One bit has 2 possibilities. Add a second and you have 4 combinations (00, 01, 10, 11). Each bit you add doubles the total. Group 8 bits and you get a byte — 2⁸ = 256 possible values, enough to represent every basic character on a keyboard. Bytes are the standard mouthful computers chew: a text file is bytes, an image is bytes, and so is a Bitcoin transaction.

Doubling is deceptively powerful

• 8 bits → 256 values
• 16 bits → 65,536
• 32 bits → about 4.3 billion
• 64 bits → about 18 quintillion
• 256 bits → a number so vast it dwarfs the count of atoms in the observable universe

The units you’ll see

Bytes stack into familiar sizes: a kilobyte (~1,000 bytes), megabyte (~a million), gigabyte (~a billion). Your phone’s storage, an internet download, the size of the Bitcoin ledger — all measured in bytes. And crucially, because information is just numbers, it can be copied perfectly: a byte copied is byte-for-byte identical to the original.

Hold onto that last fact, because it’s about to cause a very expensive problem. If digital information copies perfectly and for free, then so does digital money — and money you can copy isn’t money at all. That’s the double-spend problem, next.