This was the seminal insight of Claude Shannon, founder of information and communication theory. As this chapter illustrates all information stored on computers (documents, photos, songs, etc.) and communicated through the Internet (email, blogs, twitter posts, etc.) are represented as bits, zeros and ones.
Digital data are represented in discrete bits. Analog data are represented as a continuous quantity. Think of the difference between a digital watch that displays hours, minutes, seconds, and tenths of a second, and an analog clock, with hour hand, minute hand, and a sweep second hand.
Example: Parity Bit Scheme. For each 8-bit byte, 7 bits are used to represent the data. In and even parity scheme the eighth bit, the parity bit, is set to 1 if the number of 1s in the data (7-bits) is odd, thereby making the number of 1s in the 8-bit byte even. It is set to 0 if the number of 1s is even.
Q: What would happen in this scheme if the value of 2 bits were switched?