Bit is basically the smallest amount of storage. A bit just stores unit 0 (off) and 1 (on). Group of 8 bits is equal to 1 byte. One byte can only store 1 letter. For example:
1 letter 'A' = 8 bits (10010101)
1 letter 'C' = 8 bits (00100101)
1 letter 'T' = 8 bits (10101010)
In order to create a word such as 'CAT' = 00100101 10010101 10101010
Computers are not able to read a data in alphabets because they can only read in bits.
BPS stands for bits per second which measures how fast one data travels between two devices. For example, the speed of modem communication is measured in BPS.
Baud Rate: A baud is the number of signaling elements per second sent by a device such as modem. A modem with a high baud rate is believed to have a fast transmission of data from one device to another.
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