Two Words, One Letter Apart
Bit and byte are everywhere in technology, and because they differ by a single letter, they are constantly confused. They are closely related but not the same, and the difference is simple once you see it. One is the tiniest possible unit of digital information; the other is a small, standard bundle of them.
The Bit
A bit is the smallest unit of information a computer uses. The word is short for binary digit, and a bit can hold just one of two values: a 1 or a 0, often thought of as on or off. On its own, a single bit can barely say anything, only yes or no, on or off. Everything a computer stores is built from enormous numbers of these tiny on-or-off values.
The Byte
Because a single bit holds so little, computers usually handle bits in groups. The standard group is eight bits together, and that group is called a byte. Eight bits combined can represent a useful range of values, enough, for example, to stand for a single character of text. The byte became the basic building block for measuring data, which is why file and storage sizes are given in bytes, kilobytes, megabytes, and gigabytes, all multiples of the byte.
Where the Mix-Up Bites
The distinction matters in one place people meet it often: measuring data. By convention, a lowercase b usually means bits and an uppercase B usually means bytes. Internet speeds are typically measured in bits per second, while file sizes are measured in bytes. Since a byte is eight bits, a connection advertised as, say, eight megabits per second downloads only about one megabyte per second. Knowing that one byte equals eight bits explains why a download can feel slower than the big number on the broadband advert suggested.
Source
This article was written using information from Wikipedia.