Programmers used 2 digits to record dates. All was well and the Y2K bug wasn't noticed until the '90s when the first alarm was started. By then, all computers were still using 2 digits to record years. To us it we are advancing one year. Think about it - interest, due dates, delinquent accounts, bonuses, commissions, mortgages, bills, loans, stocks all depends on dates.
Software uses dates to compare files.
This can cause and newer file to be replaced by an older one. Everybody thought this is just a trivial matter until they realize that they have to change every reference to a date, in every program and file in use, archived, and stored. Lots of software company have to re-write their programs to be Year 2000 compatible. Computers 30 to 40 years ago are rare, bulky and gives a very low bandwidth. Instead, they were trying to get more for less.