A byte is a term first coined by Werner Buchholz in 1956 and later became a standard thanks to Bob Bemer and others. A byte is data equal to either 7 or 8 bits depending if it needs error correction (parity). You can think of a byte as one letter, for example, the letter 'h' is one byte or 8 bits and the word 'hope' is 4 bytes or 32 bits (4*8).
When looking at the size of a file, a byte is typically the smallest measurement size listed in operating systems. However, because most files are bigger than 1,024 bytes or one kilobyte, most users will see small files listed in kilobytes.
Tip: A byte is spelled as byte and not bite.