The document explains the binary number system, which is base 2, utilizing only digits 0 and 1, known as bits. It outlines the process of binary addition, the transition between decimal and binary formats, and highlights the differences between kilobytes and kibibytes. Additionally, it details how digital information is measured in bits and bytes, with conversions to larger units such as megabytes, gigabytes, and terabytes, emphasizing the importance of accurate terminology in data storage.