Data Storage Explained: From Bits to Terabytes (and Why 1 TB Isn't Really 1 TB)

By ConvertStuffNow  ·  7 min read

You buy a 1 TB hard drive and plug it in, only to find your computer shows it as 931 GB. You're not being cheated. But you are experiencing one of the most confusing inconsistencies in consumer technology — one rooted in the difference between how manufacturers and operating systems count storage.

This guide explains data storage units from the ground up: what they are, how they relate to each other, and why the number on the box is never quite what your computer shows.

Start with the bit

Everything in digital storage starts with a bit — the smallest unit of digital information. A bit is binary: it's either a 0 or a 1. Eight bits make a byte. A byte is the standard unit of storage for a single character of text — one byte holds the letter "A", for example.

From there, the units scale up:

Notice the "1,000 or 1,024" issue in that table? That's the source of all the confusion.

The 1,000 vs 1,024 problem

There are two competing definitions for these prefixes, and both are used — by different parties, for different purposes.

Decimal (SI) definition — used by storage manufacturers: In the decimal system, kilo means 1,000, mega means 1,000,000, and giga means 1,000,000,000. This is the same "kilo" you use when you say "a kilometre is 1,000 metres." Hard drive manufacturers use this definition because it makes their products look bigger.

Binary definition — used by operating systems: Computers work in binary (base 2), so a "kibibyte" in binary terms is 2¹⁰ = 1,024 bytes. A "mebibyte" is 1,024 kibibytes. A "gibibyte" is 1,024 mebibytes. Windows, macOS and Linux all traditionally display storage in these binary units — but confusingly, they label them as KB, MB and GB rather than KiB, MiB and GiB (the technically correct binary labels).

The result: a manufacturer sells you "1 TB" defined as 1,000,000,000,000 bytes. Your operating system measures that same storage in binary gigabytes (1,073,741,824 bytes each) and shows you 931 GB. Neither figure is wrong — they're just using different definitions.

How this plays out in real life

Here's what your operating system will actually show for drives marketed at common sizes:

The gap widens as drives get bigger. For a 4 TB drive, the "missing" storage amounts to about 275 GB in binary terms — a substantial chunk, even though the drive physically contains exactly the bytes it says it does.

Bits vs bytes: the internet speed trap

There's a separate and equally confusing distinction between bits and bytes that catches people out when comparing download speeds to file sizes.

Internet speeds are measured in bits per second (Mbps, Gbps). File sizes are measured in bytes (MB, GB). One byte equals 8 bits. So if your internet connection runs at 100 Mbps, your maximum download speed in megabytes per second is 100 ÷ 8 = 12.5 MB/s.

This is why a 100 Mbps connection won't download a 1 GB file in 10 seconds — it takes closer to 80 seconds (1,000 MB ÷ 12.5 MB/s). Internet providers advertise in megabits; your download manager shows you megabytes. Always divide the Mbps figure by 8 to get the real-world download speed in MB/s.

How much can you actually store?

Here are some rough real-world references to make storage sizes tangible:

These figures are rough — photo sizes vary enormously depending on resolution and format, and video files vary based on quality settings. But they give you a useful sense of scale when you're choosing a device or a cloud storage plan.

Cloud storage and the same definition problem

Cloud storage providers — Google Drive, Dropbox, iCloud, OneDrive — generally advertise their capacity in decimal gigabytes and display usage in decimal gigabytes too. This is more consistent than the hardware world, but it means that a 15 GB Google Drive account and a "15 GB" folder displayed in Windows Explorer may be counted slightly differently. In practice the difference is small enough that it rarely matters for everyday use.

The short version

Here's what you actually need to remember: hard drive manufacturers count in powers of 1,000; your operating system counts in powers of 1,024. The result is that a drive always appears smaller than its marketed size. Internet speeds are in bits, file sizes are in bytes — divide by 8 to convert. And a kilobyte is either 1,000 or 1,024 bytes depending on who you ask.

None of this is fraud. It's just two different conventions applied to the same units, without any clear labelling to distinguish them. Once you understand the system, the numbers stop being confusing.

Storage figures are approximate and may vary depending on operating system, file system overhead and formatting. Actual usable storage is always less than raw capacity.