The expression two bits mean twenty-five cents but how did this expression originate?

Answer 1

In the early years of the United States, the government had to decide what kind of money the new country would use. The Spanish Milled Dollar and its fractional parts had been used in colonial America for many years so it was decided to base the US money on it. The Spanish Milled Dollar was also called a "piece of eight" because it would often be cut into 8 equal pieces called bits . For a time both Spanish and American coins were used in daily trade so in the transition from the Spanish Dollar to the American Dollar, American quarters were worth "2 bits", or one fourth of the Spanish Dollar, the American half dollar was worth "4 bits", or one half of the Spanish Dollar. A quarter and a half dollar were worth "6 bits" or 3/4 of a Spanish Dollar. Although the "piece of eight" Spanish Dollar is no longer considered legal tender in the US, its history in our monetary system lives on in the term "2 bits"