Computers convert information that we understand (such as text, numbers, music, images) into numbers—namely, binary code—for processing. Binary code is a representation system in which each digit can have only one of two possible logic values: 0 or 1. Each digit is known as a bit (binary digit) and is a basic unit for information storage. Multiple bits are grouped together to form word-like clusters. For example, letters and other characters that we use in writing text are converted into 8-bit words in a system known as ASCII (American Standard Code for Information Interchange). In this system, each character is represented by a unique 8-bit sequence. For instance, the lowercase letter "a" is represented as 01100001, and the uppercase letter "A" is represented as 01000001. This set of 8 bits is known as a byte. Similarly, the color of each pixel of a digital image is stored using bits; the more bits per pixel, the more colors available to make the image more realistic. If there are 8 bits per pixel, each pixel can be one of 256 colors. If there are 24 bits per pixel, over 16 million colors are possible.

A computer transmits binary data using two distinct electrical states—0 volts and +5 volts—to represent 0 and 1 logic values, respectively. Within a computer, bus lines (usually in the form of copper circuit tracks on circuit boards or through cables) transmit data in parallel form. To transmit this way, the number of conductors in the bus line equals the number of bits. However, it would be too costly and impractical to use this method to transmit information over long distances such as from computer to computer—the Internet connects computers all around the world! Instead, a modem (modulator/demodulator) can be used to convert binary data into analog signals, which allows more than one bit to be transmitted simultaneously over a variety of forms of conductors such as twisted pair wires and cable.

Bandwidth is a measure of the amount of data that can be transmitted during a given time period. Bandwidth is typically measured in bits per second (bps). The higher the bandwidth, the greater the volume of data that can be transmitted per second. A dial-up connection using twisted pair conductors has a bandwidth of 56 kilobits per second (Kbps), while a DSL connection has a bandwidth of about 1.5 megabits per second (Mbps). A fiber optic connection can have even greater bandwidth, with typical values of 1.5–3 Mbps, but it can provide more than 10 gigabits per second (Gbps). Data transmission speeds vary depending on the type of Internet connection and the amount of information being transmitted. For example, a page of text would take about 0.34 seconds to transmit over a dial-up connection and about 0.013 seconds over a DSL connection. In comparison, an MP3 song, which is about 4 megabytes (MB) of data, would take about 9.5 minutes to transmit over a dial-up connection and about 21 seconds over a DSL connection.

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