From The Collaborative International Dictionary of English v.0.48:
Bit \Bit\ (Computers) [binary digit.]
1. the smallest unit of information, equivalent to a choice
between two alternatives, as yes or no; on or off.
[PJC]
2. (Computers) the physical representation of a bit of
information in a computer memory or a data storage medium.
Within a computer circuit a bit may be represented by the
state of a current or an electrical charge; in a magnetic
storage medium it may be represented by the direction of
magnetization; on a punched card or on paper tape it may
be represented by the presence or absence of a hole at a
particular point on the card or tape.
[PJC]
Bit my bit, piecemeal. --Pope.
[1913 Webster]