While a single bit can define a boolean value of True (1) or False (0), an individual bit has little other use. Therefore, in computer storage, bits are often grouped together in 8-bit clusters called bytes. Since a byte contains eight bits that each have two possible values, a single byte may have 28 or 256 different values.
The terms "bits" and "bytes" are often confused and are even used interchangeably since they sound similar and are both abbreviated with the letter "B." However, when written correctly, bits are abbreviated with a lowercase "b," while bytes are abbreviated with a capital "B." It is important not to confuse these two terms, since any measurement in bytes contains eight times as many bits. For example, a small text file that is 4 KB in size contains 4,000 bytes, or 32,000 bits.
Generally, files, storage devices, and storage capacity are measured in bytes, while data transfer rates are measured in bits. For instance, an SSD may have a storage capacity of 240 GB, while a download may transfer at 10 Mbps. Additionally, bits are also used to describe processor architecture, such as a 32-bit or 64-bit processor.
Updated: April 20, 2013