Binary numbers are the basis for how computers work. They consist of only two digits, 0 and 1, whereas the standard number system is base 10 with ten digits. Computers use the binary system because their internal workings are based on two states - on or off, which can be represented by 1 and 0. The document teaches students about place value in binary, has them practice converting numbers between binary and base 10, and explains that understanding binary is important because it shows how computer processing works digitally with two states.