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This video tutorial discusses how character sets like ASCII and Unicode represent text in binary, the foundational data format for computers. It explains that all data, including text and emojis, requires specific binary codes. With one binary digit, only two characters can be represented; with two digits, four characters can be represented. To accommodate the 26 letters of the alphabet, at least five bits are needed, allowing for 32 characters (2^5 = 32). The tutorial emphasizes the relationship between bits and the number of characters that can be represented mathematically, highlighting the base-two nature of binary.