How does a digital computer represent data internally?

A digital computer represents data internally using binary code, which consists of two states: 0 and 1. These binary digits, or bits, are grouped together to form larger units such as bytes (8 bits) and Words, enabling the representation of various data types, including numbers, characters, and instructions. This binary system allows computers to process and store complex information efficiently using electronic components like transistors that can switch between the two states.