Why are the Actual Storage Capacities of Computer Drives less than advertised?

If you have ever gone out to purchase an external hard drive or an SSD, chances are you end up buying the ones advertised as 1TB (terabyte) or 2TB (terabyte). It is when you go home and plug them into a computer you find out that the drive advertised as 1TB (terabyte) has only 931 GB (gigabyte) while the 2TB has around 1.8 TB.

So, what is actually going on? Is it false advertising?

Well yes... but no. Let me explain...

The discrepancies arise due to the units of measure of digital storage. You might have heard of GB - Gigabyte and TB - Terabyte but there is something called GiB - Gibibyte and TiB - Tebibyte and the storage capacities of computer drives are measured in Gibibyte and Tebibyte rather than Gigabyte and Terabyte.

Kilobyte (KB)	Kibibyte (KiB)
Megabyte (MB)	Mebibyte (MiB)
Gigabyte (GB)	Gibibyte (GiB)
Terabyte (TB)	Tebibyte (TiB)

The difference between them is actually the number of bytes in each of them. KB, MB, GB and TB are measured in powers of 10 (decimal) while KiB, MiB, GiB and TiB are measured in powers of 2 (binary). This is also the reason by 1KB ≠ 1000 bytes but equal to 1024 bytes.

1 KB = 10³ bytes = 1 thousand	1 KiB = 2¹⁰ bytes = 1024 bytes
1 MB = 10⁶ bytes = 1 million	1 MiB = 2²⁰ bytes
1 GB = 10⁹ bytes = 1 billion	1 GiB = 2³⁰ bytes
1 TB = 10¹² bytes = 1 trillion	1 TiB = 2⁴⁰ bytes

While the actual numbers of bytes are pretty close in both the notations, as we go further and larger, it starts to diverge more. The percentage numbers in parentheses refer to the error in closeness.

Source: Binary prefix - Wikipedia

So, the answer to why drives have less storage than advertised is because under the hood, computers are measuring the storage/number of bytes in terms of powers of 2, that is in KiB, MiB and so on but the labels are incorrectly displayed KB, MB (powers of 10).

Since 1 GiB is larger than 1 GB that is 1 GiB = 1.074 GB, if we divide 1000 GB by 1.074 GB/GiB we get 931.

Now the question arises, why doesn't Windows use GiB and TiB notations?

As we know that computers use binary system, computations are easier to deal with numbers in powers of 2 ever since the olden days of computing.

And also, since numbers in powers of 2 are quite close to numbers in powers of 10 the trend of using the same notations as GB and TB has ever continued. But as people started using the same names Gigabyte, Terabyte, etc. for numbers of both powers of 2 and powers of 10 in all other technical areas the confusion has also increased ever since.

To address this issue, the International Electrotechnical Commission (IEC) came up with the prefixes Kibi, Mebi, Gibi, Tebi, etc. where the "bi" is short for binary. But the problem is these notations/prefixes never caught up mainstream in the commercial computing market and companies too, ignore them.