Posted by Scott Marsden on October 19, 2000
In Reply to: Two Bits posted by ESC on October 17, 2000
: : What is the origin of a quarter being equal to "Two Bits"?
: "Listening to America" by Stuart Berg Flexner (Simon and Schuster, New York, 1982) has some detailed about "bits": ".Being worth one-eighth of a Spanish peso or Spanish dollar, the original Spanish 'real' or 'bit' was worth 12 ½ cents. Not only was this bit itself a coin, but the peso could be cut into halves, quarters or pie-shaped wedges of eights, so a bit was both a coin and a cut-off section of a peso worth the same amount. This 'bit,' being 12 ½ cents, gave us our term 'two bits' (1730, originally as two separate bits or the sum of 25 cents, then as our own 25-cent coin in 1792)."
As well, this is where the phrase "piece of eight" comes from. A peso is a piece of eight, because one peso can be cut into eight reals, or "bits".