Imagine taking a black and white picture. Divide the paper up in to lots of small squares. Then, through the image line by line and write down a 1 if a square is mostly black or a 0 if it is mostly white. Now you have a long list of 1s and 0s.
Now you call up your friend. He has a sheet of paper with a similar grid on it. You go through the list of 1s and 0s, and he colours in a square if you say 1 or leaves it blank if you say 0. At the end, he has a picture similar to yours.
This is basically what fax machines do. One machine scans a piece of paper, works out where the light and dark bits are, phones up another machine, and that one prints out a copy of the image.
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