Introduction
Binary coded decimal (BCD) is a numerical representation system that uses a combination of binary digits to represent decimal numbers. Each decimal digit is represented by a 4-bit binary code, allowing for easy conversion between binary and decimal representations.

Explanation
BCD uses four binary digits to represent each decimal digit. This allows for a direct one-to-one mapping between decimal and binary representations, making it easier to perform arithmetic operations on decimal numbers using binary logic.

Binary Digits
In binary representation, each digit can have two possible values: 0 or 1. Therefore, a single binary digit can represent two different values. However, a decimal digit can have ten possible values: 0 to 9. To represent all ten decimal digits using binary digits, we need to use a combination of multiple binary digits.

Decimal Digits
In the decimal number system, we have ten digits: 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9. These digits can be represented using four binary digits, as shown below:

- Decimal digit 0 is represented as 0000 in BCD.
- Decimal digit 1 is represented as 0001 in BCD.
- Decimal digit 2 is represented as 0010 in BCD.
- Decimal digit 3 is represented as 0011 in BCD.
- Decimal digit 4 is represented as 0100 in BCD.
- Decimal digit 5 is represented as 0101 in BCD.
- Decimal digit 6 is represented as 0110 in BCD.
- Decimal digit 7 is represented as 0111 in BCD.
- Decimal digit 8 is represented as 1000 in BCD.
- Decimal digit 9 is represented as 1001 in BCD.

Example
Let's take an example to understand how BCD works. Suppose we want to represent the decimal number 25 in BCD.

- The decimal digit 2 is represented as 0010 in BCD.
- The decimal digit 5 is represented as 0101 in BCD.

Therefore, the BCD representation of the decimal number 25 is 0010 0101.

Conclusion
In conclusion, BCD is a numerical representation system that uses four binary digits to represent each decimal digit. This allows for a direct mapping between decimal and binary representations, making it easier to perform arithmetic operations on decimal numbers using binary logic.