As we know that 1MB=1024 KB but the manufacturer considers 1 Megabyte to be 1000 Kilobytes, 1 Gigabyte to be 1000 Megabytes, 1 Terabyte to be 1000 Gigabytes and so on. This is correct considering that kilo means 1000 and mega means 1000000 (10^6). However, computers calculate on base 2 and to them, 1 MB is actually 1024 kilobytes, 1GB is 1024MB and 1 TB is 1024GB. This difference in the method of computation is responsible for this "missing space."
Lets take an example of a 500 GB hard disk. From a manufacturer's point of view, the 500GB will have 500*1000*1000*1000 = 500000000000 bytes. From a computer's point of view, 500GB is actually 500*1024*1024*1024 = 536870912000 bytes. So, a hard drive that promises to have 500 GB storage space will actually display 465.66GB, 536870912000-500000000000 = 36870912000 bytes (34.34GB) less storage space when connected to a you computer
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