This paper reviews the economic implications of digital technology, focusing on how it reduces five key economic costs: search, replication, transportation, tracking, and verification. Digital technology, which represents information in bits, has significantly lowered the cost of data storage, computation, and transmission. This has led to changes in economic activity, with digital economics examining how these cost reductions affect markets. The paper begins with a brief history of digital technology and the internet, highlighting key developments such as the commercialization of wartime technologies, the rise of the internet, and the development of standards for internet communication. It then discusses how digital technology has reduced search costs, enabling consumers to compare prices and find products more easily. This has led to lower prices and price dispersion, though substantial price dispersion remains due to differences in product quality and retailer policies. The paper also examines how digital technology has increased the variety of products available, leading to the "long tail" phenomenon where niche products can be sold more easily. It discusses the impact of low search costs on matching, facilitating exchanges through digital platforms and increasing the efficiency of trade. The paper highlights the prevalence of digital platform-based businesses, which enable efficient matching and reduce transaction costs. The replication cost of digital goods is zero, allowing for non-rival consumption. This has led to questions about pricing strategies, such as bundling, and the economics of non-rival goods. The paper also discusses the motivations for providing digital public goods, such as open source software and Wikipedia, and the challenges of ensuring data security and privacy in the digital age. Finally, the paper addresses the impact of digital technology on copyright policy, noting that while digital technology has made it easier to copy information, it has also led to challenges in enforcing copyright. The paper concludes that digital technology has transformed economic activity, reducing costs and increasing efficiency, but also raising important policy questions about data security, privacy, and the regulation of digital markets.This paper reviews the economic implications of digital technology, focusing on how it reduces five key economic costs: search, replication, transportation, tracking, and verification. Digital technology, which represents information in bits, has significantly lowered the cost of data storage, computation, and transmission. This has led to changes in economic activity, with digital economics examining how these cost reductions affect markets. The paper begins with a brief history of digital technology and the internet, highlighting key developments such as the commercialization of wartime technologies, the rise of the internet, and the development of standards for internet communication. It then discusses how digital technology has reduced search costs, enabling consumers to compare prices and find products more easily. This has led to lower prices and price dispersion, though substantial price dispersion remains due to differences in product quality and retailer policies. The paper also examines how digital technology has increased the variety of products available, leading to the "long tail" phenomenon where niche products can be sold more easily. It discusses the impact of low search costs on matching, facilitating exchanges through digital platforms and increasing the efficiency of trade. The paper highlights the prevalence of digital platform-based businesses, which enable efficient matching and reduce transaction costs. The replication cost of digital goods is zero, allowing for non-rival consumption. This has led to questions about pricing strategies, such as bundling, and the economics of non-rival goods. The paper also discusses the motivations for providing digital public goods, such as open source software and Wikipedia, and the challenges of ensuring data security and privacy in the digital age. Finally, the paper addresses the impact of digital technology on copyright policy, noting that while digital technology has made it easier to copy information, it has also led to challenges in enforcing copyright. The paper concludes that digital technology has transformed economic activity, reducing costs and increasing efficiency, but also raising important policy questions about data security, privacy, and the regulation of digital markets.