How many bits are in a quarter dollar?

Answer 1

Two.

An Explanation:

When the US became independent there were no official US Coins. Colonists had been using a combination of old British and Spanish coins in daily commerce. One of the most common coins was the Spanish 8-reale coin, also known as a "Spanish dollar" or, yes, "piece of eight"! However individual reale coins themselves didn't circulate in the colonies which caused problems when smaller denominations were needed for making change. The colonists adapted by actually chopping Spanish dollars like Pizza slices to create 4-, 2- and 1-reale chunks that became known as "bits".

When Thomas Jefferson designed a coinage system for the new US, he wanted it to be compatible with coins already in use so he proposed that the new American dollar have the same size and value as the Spanish dollar coin.

At the same time he wanted a decimal system based on multiples of 5 and 10, which didn't quite match the 2/4/8 ratios used in Spanish coins. Half-dollars matched 4 bits (half of a Spanish dollar) exactly, and dimes (1/10) were worth close enough to 1-bit pieces (1/8), but what about those 2-bit pieces?

Two-bit pieces were one of the most common small-denomination "coins" in daily use. Even though a 20-cent coin would have been the reasonable choice in a purely decimal system, its value wasn't close enough to the 2-bit piece to be a reasonable replacement. Jefferson and the coinage committee were forced to compromise on a 25-cent coin that matched exactly.

Thus like the 1-cent coin that retains the name of its British 1-penny ancestor, the quarter keeps the nickname of the Spanish piece it replaced - two bits.