Other contributors have said "What is byte?" is the same question as "What is a byte?" If you believe that these are not asking the same thing and should be answered differently, click here
ONE Thousand bytes =1kilo byte. Remember the prefix k for kilo means a thousand of the quantity. Eg 1km means a thousand metres 1kg means a thousand gramms
Because the people who decided to name them bits decided that 8 bits makes up a byte. It is just like asking why is a knife called a knife no real reason.