A circuit can remember a bit by feeding some of its output back into its own input. The simplest useful example is a set-reset latch.

An SR latch has two control inputs that can force the stored state toward $1$ or $0$. When neither control is active, feedback maintains the previous output.

State changes the problem

In combinational logic, output is a function only of current input. In a latch, the same current inputs can produce different outputs depending on the previous state.

This makes a latch a sequential logic element.

Feedback creates memory

Two cross-coupled gates can reinforce one of two stable configurations. Once one state is established, the feedback loop keeps it after the initiating input disappears.

Invalid or ambiguous conditions

Simple SR-latch designs contain an input combination that should not be used because it attempts to set and reset the stored bit simultaneously and can leave the final state dependent on timing.