A binary clock works by indicating its time as combinations of powers of two. Consider the example below.
Let's say I've built a very simple 60-second binary egg timer. My binary egg timer is just a wooden board with 6 light bulbs plugged in a horizontal row. The position of the lights, and whether they are on or not, would indicate how many seconds are left by adding together powers of two.
60-second Binary Egg Timer:
Light 1 : Light 2 : Light 3 : Light 4 : Light 5 : Light 6
represents the following values
2^5 (32) : 2^4 (16) : 2^3 (8) : 2^2 (4) : 2^1 (2) : 2^0 (1)
The egg timer starts with 60 seconds, so my board would be lit up as follows (O=on, X=off):
OOOOXX = 2^5+2^4+2^3+2^2 = 32+16+8+4 = 60 seconds
with 33 seconds to go my board looks like this:
OXXXXO = 2^5+2^0 = 32+1= 33 seconds
with 15 seconds to go my board looks like this:
XXOOOO = 2^3+2^2+2^1+2^0 = 8+4+2+1 = 15 seconds
et cetera. All the seconds between 1 and 60 can be represented via combinations of powers of two. When the timer has run out no lights are on (XXXXXX) indicating zero seconds.
This is the principle behind binary clocks except they have to indicate hours and minutes as well. The hours section of a binary clock only needs 5 lights to indicate 24-hour time.
You can use the same principle to count up to 2^9=512 using your fingers!