In this System a string of bits may be used to represent integers in the Decimal Number System . Four bits can be used to represent a Decimal digit between 0 and 9 in the binary notation. A string of bits of arbitrary length may be divided into consecutive sets of four bits. With each set representing a decimal digit. The string then represents the number that is formed by those decimal digits in conventional decimal notation. For example, in this system the bit string 00110101 is separated into two strings of four bits each: 0011 and 0101. The first of these represents the decimal digit 3 and the second represents the decimal 5, so that the entire string represents the integer 35.

In the binary coded decimal system we use 4 bits, so this four bits represent sixteen possible states. But only 10 of those sixteen possibilities are used. That means, whose binary values are 10 or larger, are invalid in Binary Coded Decimal System.