Binary is a base-2 numeral system that represents numeric values using only two symbols, 0 and 1. Computers use binary to represent all data as strings of 0s and 1s. Each bit (binary digit) has a numeric value based on its position in the binary number. Binary numbers can be converted to and from decimal using tables that assign numeric values to each bit position. Hexadecimal is similar but uses 16 symbols (0-9 and A-F) to represent 4 binary digits per symbol, making it more compact and human-readable than binary.