Computers don’t “understand” anything, but as to why they use binary – it’s easy to wire.
At a physical level, computers represent the 0’s and 1’s of binary as different states in a physical electrical circuit (usually *not* just 0=”off” and 1=”on”, for the record). You can use more states if you want to invent more complex circuits, but it gets progressively harder to do that and there’s no reason to do it, so we don’t.
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