Bit

A bit is a single instance of information, and the simplest possible denomination in a computer. A bit holds either a 1 or a 0 value, depending on whether the corresponding transistor is on or off.

In laymans terms, a computer uses ones and zeroes to store information, and a bit is a single one or zero.

Each one of the letters I am typing takes a certain amount of bits to display it to your monitor.

Another example would be that the entire website here contains millions of bits, and together they make the page, telling the computer what to put where.