The term 'peice of eight comes from when coinage was scarce-the Spanish
milled dollars were cut into eight peices,or bits.Each bit was worth about
12 1/2 cents-hence,2 bits were about 25 cents
(ever hear,shave and a haircut,two bits?)

The term "bitt" appears in the Colonial Records of Pennsylvania in the 17th
century, many decades before the introduction of round pieces of eight in 1732.
Prior to that, rough "cob" cons were minted. A "bit" or "bitt" is simply a
small coin (similar to the British "threepenny bit"), and was applied then to
the Spanish-American real since it was the smallest coin in current use. It
has nothing to do with cutting of coins; this is a false etymology. Cut
coins were called "sharpshins."

Bob Leonard