Data storage and data transfer are all done in binary because our technologies all work with on/off signals. Hexadecimal (base-16) would require having 16 unique and differentiable signals (logic levels) rather than on/off.
Because there’s no such thing as a digital signal in real life (on/off isn’t real, there’s always tiny fluctuations) logic levels don’t use 0 volts or max voltage to represent 0 and 1. Instead, they use various thresholds and zones to represent different logic levels. With TTL technology, logic 0 is 0 volts to 0.8 volts, and logic high is 2 volts to the collector voltage (usually 5 volts). Those threshold zones exist to prevent random fluctuations from flipping from one logic level to another.
Since with base-16 you’d need 16 distinct logic levels, you’d need to have 16 different threshold zones to represent those logic levels as voltage. This poses even more of an issue when you consider that the allowable voltage range for modern desktop CPUs is 0 volts to ~1.4 volts.
Hexadecimal is used to display binary values because it’s more compact to display on a screen, since two hexadecimal digits can be used to represent eight binary digits, or one byte.
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