The definition of a bit is the smallest amount of memory a computer can hold. A bit can literally hold only one of two values:
0
1
Think of this as a bit either being on or off, light or dark, true or false.
While a bit in itself can hold very little data, bits are strung together in larger chunks that can hold more useful information. For example, eight bits make up a byte, which can hold a value from 0-255.