In his 1948 paper "A Mathematical Theory of Communication", Claude Shannon first defines the term "bit" as a unit for information and the constituents of a general information system.
(The Bell System Technical Journal, Vol. 27, pp. 379–423, 623–656, July, October, 1948)
link to the full pdf: http://cm.bell-labs.com/cm/ms/what/shannonday/shannon1948.pdf
>> bit
"The choice of a logarithmic base corresponds to the choice of a unit for measuring information. If the base 2 is used the resulting units may be called binary digits, or more briefly bits, a word suggested by J. W. Tukey. A device with two stable positions, such as a relay or a flip-flop circuit, can store one bit of information. N such devices can store N bits, since the total number of possible states is 2N and log2 2N =N. If the base 10 is used the units may be called decimal digits."
>> communication system
"By a communication system we will mean a system of the type indicated schematically in Fig. 1. It consists of essentially five parts:
1. An information source which produces a message or sequence of messages to be communicated to the receiving terminal. The message may be of various types: (a) A sequence of letters as in a telegraph of teletype system; (b) A single function of time f (t) as in radio or telephony; (c) A function of time and other variables as in black and white television — here the message may be thought of as a function f (x;y; t) of two space coordinates and time, the light intensity at point (x;y) and time t on a pickup tube plate; (d) Two or more functions of time, say f (t), g(t), h(t)—this is the case in “threedimensional” sound transmission or if the system is intended to service several individual channels in multiplex; (e) Several functions of several variables—in color television themessage consists of three functions f (x;y; t), g(x;y; t), h(x;y; t) defined in a three-dimensional continuum—we may also think of these three functions as components of a vector field defined in the region — similarly, several black and white television sources would produce “messages” consisting of a number of functions of three variables; (f) Various combinations also occur, for example in television with an associated audio channel.
2. A transmitter which operates on the message in some way to produce a signal suitable for transmission over the channel. In telephony this operation consists merely of changing sound pressure into a proportional electrical current. In telegraphy we have an encoding operation which produces a sequence of dots, dashes and spaces on the channel corresponding to the message. In a multiplex PCM system the different speech functions must be sampled, compressed, quantized and encoded, and finally interleaved properly to construct the signal. Vocoder systems, television and frequency modulation are other examples of complex operations applied to the message to obtain the signal.
3. The channel is merely the medium used to transmit the signal from transmitter to receiver. It may be a pair of wires, a coaxial cable, a band of radio frequencies, a beam of light, etc.
4. The receiver ordinarily performs the inverse operation of that done by the transmitter, reconstructing the message from the signal.
5. The destination is the person (or thing) for whom the message is intended."
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