People have heard electric basses for a very long time. People know you plug the bass into the amp and it makes sound. But people don't really know why.... until now.
First, if you take a look at a bass, look in between the bottom of the neck and the bridge. you will see the pickups there. these pickups are actually magnets. These magnets have a north and south pole. these magnets have a wire coiled around them. If you move a conductive material through a static field, then the material, the wire in this case, will induce a current.
By picking the string you are disturbing the field. The magnetic field then moves relative to the coil, which causes a current to be induced in the coil. the current goes through the bass and this is where the nobs come into play. This is where you can alter the sound of your bass before the signal gets to the actual amp itself.
The amp is broken down into to parts, the preamp and the poweramp. The preamp shapes the sound, this is where the gain, EQ, tone etc. comes into play. then the poweramp comes in. the poweramp just amplifies the sound. The only knob on the amp that really effects this part of the amp is the total output knob, or the volume.