Read But How Do It Know? - the Basic Principles of Computers for Everyone for Free Online Page B

two bits, we want to use all four possibilities, so we have to keep the bits in order.
    How many different possibilities are there when you use eight bits? If all you have is one bit, it can be in one of two states. If you add a second bit, the pair has twice as many states as before because the old bit has its two states while the new bit is one way, and then the old bit has its two states while the new bit is the other way. So two bits have four states. When you add a third bit, the first two have four states with the new bit off and four states with the new bit on, for a total of eight states. Every time you add a bit, you just double the number of possible states. Four bits have 16 states, five have 32, six have 64, seven have 128, eight have 256, nine have 512 states, and so on.
    We are going to take eight bits, and call it a byte. Since a bit is a thing that has a location in space, that can be in one of two states, then a byte is a thing that has eight separate locations in space, each of which can be on or off, that are kept in the same order. The byte, taken as a whole, is a location in space that can be in any one of 256 states at any given time, and may be made to change its state over time.

 
    Codes
    A bit could only represent yes/no types of things, but now that we have 256 possibilities, we can look for things in our lives that are slightly more complicated.
    One of the first things that might fit the bill is written language. If you look in a book and see all of the different types of symbols that are used to print the book, you will see all 26 letters of the alphabet in uppercase as well as lowercase. Then there are the numbers 0 through 9, and there are punctuation marks like periods, commas, quotes, question marks, parentheses and several others. Then there are special symbols like the ‘at’ sign (@,) currency ($,) and more. If you add these up, 52 letters, 10 numbers, a few dozen for punctuation and symbols, you get something like 100 different symbols that may appear printed on the pages of the average book.
    From here on out, we will use the word ‘character’ to mean one of this sort of thing, one of the letters, numbers, or other symbols that are used in written language. A character can be either a letter, a number, a punctuation mark or any other type of symbol.
    So we have written language with about 100 different characters, and our byte with 256 possibilities, maybe we can represent language with bytes. Lets see, how do you put an ‘A’ into a byte? There is nothing inherent in a byte that would associate it with a character, and there is nothing inherent in a character that has anything to do with bits or bytes. The byte doesn’t hold shapes or pictures. Dividing a character into eight parts does not find any bits.
    The answer, as before, is to use a code to associate one of the possible states of the byte with something that exists in the real world. The letter ‘A’ will be represented by a particular pattern of 1s and 0s in the bits of a byte. The byte has 256 different possible states, so someone needs to sit down with pencil and paper and list out all 256 of those combinations, and next to each one, put one of the characters that he wants that pattern to represent. Of course, by the time he gets to the 101 st line or so, he’ll run out of characters, so he can add every type of rarely used symbol he can think of, or he can just say that the rest of the combinations will have no meaning as far as written language is concerned.
    And so, in the early days of computers, each manufacturer sat down and invented a code to represent written language. At some point, the different companies realized that it would be beneficial if they all used the same code, in case they ever wanted their company’s computers to be able to communicate with another brand. So they formed committees, held meetings and did whatever else they needed to do to come up with a code that they could all agree