Why is a quarter called “two bits”?

In England bit has been applied to small coins for centuries. The term at one time was thieves’ slang for money in general. Thomas Dekkar so used it in A Knight’s Conjuring: Jests to Make You Metis, first printed in 1607. Later bit was applied to any small coin, especially to the smallest coin in general circulation. Even today the British use, the term in such phrases as three penny bit. Two bits, meaning a quarter of a dollar, originated in the West Indies where bit was applied in the seventeenth and eighteenth centuries to small silver coins forming fractions of the Spanish dollar. It was applied specifically to the real, which was equal to one-eighth of the Spanish silver dollar or “piece of eight,” which circulated freely in the English colonies and of which the. American dollar was an adaptation in size, shape and value. In those days it was a common practice to cut the Spanish silver dollar into wedge shaped pieces for use as small coins. A two-real piece represented a quarter of the whole. The English colonists referred to a one-real piece as a “bit” and a two-real piece as “two bits.” In that part of his secret diary written from 1709 to 1712 William Byrd of Westover continually mentioned losing “a bit” and “two bits” at billiards, cricket or cards. He also gave “two bits” to servants as tips. When the Spanish dollar disappeared from circulation in America and was replaced by the United States dollar, bit survived only in such phrases as two bits, meaning “a quarter,” and four bits, meaning “half a dollar.” Twelve cents and a half, which corresponded to the original English shilling, is seldom if ever called “a bit,” although in some sections of the United States fifteen cents is called a “long bit,” and ten cents a “short bit.”