BIOS - Basic Input Output System. It is a set of instructions that tells the computer who it is and what it has.
Your computer wakes up with total amnesia. The BIOS acts as a set of instructions telling it about itself. It's as if you had to wake up in the morning and read some instructions telling you how to use your eyes, where your brain is and what's in it, etc.
Another term you might hear is CMOS. I think this is Complimentary Metal Oxide Semiconductor. Think the BIOS lives in the CMOS.
And like most memory, the settings in the BIOS are dynamic - meaning they need power. If you remove the battery on your motherboard, or it runs out, you will lose the settings in the BIOS. However, you don't lose the BIOS entirely because it is ROM not RAM. Read Only Memory.
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