I am aware that the entropy content of a black hole is proportional to the area of its event horizon, and that this can be boiled down to the bit content of a Planck area on the horizon, but I have the following questions about this proportionality:
Does the entropy in some sense reside on the event horizon, or is the proportionality just an abstract relationship? And
If the entropy does reside on the event horizon, how is it encoded in the surface area? That is, if there's one bit contained within a Planck area, what differentiates a Planck area that represents a "zero" bit from one that represents or contains a "one" bit?