An early lesson for computer engineering students is in how computers handle data. This lesson deals with the fundamental unit of computer data known as a bit. These single units combine to form larger units, allowing computers to share more complex (larger) amounts of information. Eight bits stacked together form a byte, which is the principle data size computers use to represent and store your files and programs as megabytes and gigabytes.
Bits versus Bytes
Computers communicate using binary digits or bits. Binary digits express values using the numbers 0 and 1 as opposed to decimal digits which use numbers 0 to 9. Since a bit alone cannot represent enough data to be useful to humans, bits are grouped together, eight at a time, to form a byte. In other words, two bytes are equivalent to 16 bits, and three bytes the same as 24 bits. The more complex a document or application is, the more bytes are required to represent and store it in a computer.
Modern computers deal in very large amounts of bytes. For example, when purchasing a new computer, you will always note the size of its hard drive expressed in gigabytes. Here, "giga" is the prefix but there are many others such as "kilo," "mega" and "tetra". Byte prefixes have origins in the Greek or Latin languages but have a numerical value in computer language. The prefix kilo, also used in the metric system, denotes 1024 bytes or a kilobyte. The number isn't exactly 1,000 because bytes are based off the binary system (0 and 1) where 2^10 = 1024.
Megabytes versus Gigabytes
Megabytes and gigabytes, like the kilobyte, are magnitudes of bytes. Basically, a gigabyte is larger than a megabyte. The difference is similar to that between one billion and one million, respectively. For example, when you buy a computer with 500 GB, this means it can store approximately 500 billion bytes of information. A typical MP3 file may take up 5 MB or about 5 million bytes of that space. The exact numerical value for a megabyte is 2^20 (1,048,576) and a gigabyte is 2^30 (1,073,741,824).
Terabytes and Beyond
Theoretically, there is no limit to the size of a byte because numbers are infinite. Practically however, computer hardware does have technical limits and the more powerful a computer is, the more expensive it becomes. Though, because consumer data -- music, movies, pictures -- is increasingly stored digitally, there is growing demand for larger hard drives. Terabyte (2^40 = 1,099,511,627,776) hard drives were rarely heard of 10 years ago but are affordable as of time of publication, costing less than $150. Beyond the terabyte is the petabyte (2^50) and the exabyte (2^60) and so on.