According to www.wordorigins.org, originally it labeled any small
thing, but it eventually came to denote 1/8th of a peso. What word is
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According to www.wordorigins.org, the word bit "ultimately comes from the Old English
bita, [which] originally meant a morsel of
food. From there it went on to denote any small thing, particularly a fraction
of a larger whole.
By 1683 in the
English-speaking American colonies bit had come to denote a Spanish/Mexican
real, or one eighth of a peso. The peso was a common form of currency in the
colonies. And in the early days of the United States, pesos were commonly used
as dollar coins and real coins represented twelve and half cents, hence two
bits equaled 25 cents."
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