The binary number system uses only two digits: 0 and 1. This system is the foundation of all modern computing, as computers process data in binary form. Each digit in binary represents a power of 2, making it a base-2 numeral system. For example, the binary number 101 translates to the decimal number 5. In binary, 0 represents the "off" state, while 1 represents the "on" state. This simple representation allows computers to perform complex calculations and store information efficiently. Understanding binary is essential for fields like computer science and digital electronics.