Definition: A bit is the smallest unit of data transfer on a computer network. Bits represent the two binary values “on” or “off.” Bits are often stored on computers as the digital numbers ‘1’ and ‘0’, but in networking, bits can also be “encoded” by electrical signals and pulses of light.
In computer networking, some network protocols send and receive data in the form of bit sequences. These are called bit-oriented protocols. Examples of bit-oriented protocols include PPP.