How do computers understand bits?

[sysprog]

Hello.
How do computers and electronics understand bit signals and information? how do they process it?
I know that a bit consists of ons and offs, but how does the computer understand this and what to do with it??
Is there something I don't understand?
Thank you.

I'm sure you know that computers and electronics don't actually understand bit signals and information, they respond to signals and generate signals, and they accept, process, and report information. Colloquially, they made be said to "know" or "understand", but such usage of human knowledge and reasoning terms as that are conveniences for our own understanding. We may say that Google knows everything (including many things that are not true) but in reality, only we (and perhaps other sentient beings, epistemic questions aside) can properly be said have knowledge.

"How", interpreted as "in what or which way" computers process information, depends on the processor architecture, and on the process specification (the program) that it is given by which to process it. (Please note that the word "process" is in that sentence used both as a noun and a verb.) "How", interpreted as "by what internal mechanism", in modern electronic computers, is by semiconductor switching circuits, arrays of interrogable and switchable (readable and writeable) memory devices, and communication mechanisms.

Your questions, if interpreted liberally, bring up multiple fields of study and endeavor.

A rudimentary non-electronic digital computer apparatus is the abacus. It's not a computer by itself, because its operator is required to interpret the program and perform the mechanical actions, but it does passively hold sequences of digital memory states. If you watch a video of someone extracting 4 digits of the square root of 2, you can see elements that are present in every digital computer. The position of the beads is the state of the memory. The manipulation of the beads is the processing. The person doing the manipulation is the processor. The rules the person is following constitute the program. The problem he is trying to solve is the input to the program. The result read as the solution is the output from the program.

You can download an abacus for windows here: http://www.softpedia.com/get/Others/Home-Education/Soroban.shtml