After the electricity is applied little hamsters get an electroshock which makes them spin their wheel faster and faster. They alternate the speed of their self-powered turbine which drops different letters into the slots and that is what you see on your monitor.
Nah, just kidding. Honestly it took some time for me to process it. I thought about this when I was around 10 years old all the way up until 17 when I figured out my solution.
We know how small everything is now, everything used to be so much bigger. Bigger computers (made by man) used to make smaller computers (made by machine). A beautiful concept, really.
The idea is switches, it's all binary, it's all it ever was. It's all, take the null (0) path, take the whole (1) path.
Besides, what am I supposed to do, you better be paying me to write such an article. $200 up front, $400 once completed.
You'll figure it out over time, just pay a lot of attention, try to learn what electronics do, look at an electronics schematic. At the bottom their should be a reference for each letter and number combination on the schematic.
Check out: "http://www.electronics-lab.com/projects/telephone/007/"
On the image, you see C1, toward the bottom you will find
Name: C1
Quantity: 1
Part it refers to: 330pF Capacitor
Look up what a capacitor is on wikipedia, look up what a transistor is on wikipedia. Once you learn the basics, everything will just come together. Also, pay close attention to the wiring scheme associated with the device. It really is truly impressive.
I happened to have repaired pinball machines for fun in my spare time and I must say it really does all come together.