where did the term two bits come from?

Answer 1

According to a book I have, the term comes from Spanish money. Our money is the dollar much like the Spanish use. Spain and Mexico share that. The 12 and 1/2 cent thing mentioned by the other answerer matches pretty closely what my book says. The only difference is the nation of origin.
The guy referring to numerical bases should pay attention to the context of the question. He's right about the number's history, but it's a completely different question/answer.

Answer 2

"Two bits is equal to 25 cents; they are counting in four equal parts of a dollar ending at a dollar, rather than ending on "eight bits".

"Listening to America" by Stuart Berg Flexner (Simon and Schuster, New York, 1982) has some detailed about "bits": ".Being worth one-eighth of a Spanish peso or Spanish dollar, the original Spanish 'real' or 'bit' was worth 12 ½ cents. Not only was this bit itself a coin, but the peso could be cut into halves, quarters or pie-shaped wedges of eights, so a bit was both a coin and a cut-off section of a peso worth the same amount. This 'bit,' being 12 ½ cents, gave us our term 'two bits' (1730, originally as two separate bits or the sum of 25 cents, then as our own 25-cent coin in 1792)."

Answer 3

"Two bits " is an American term for 25 cents. It comes from the British slang "bit." For example, a British person might say "a threepenny bit." The slang was adopted in the American Southwest to refer to the old Mexican real, which was worth 12 1/2 cents.

Answer 4

2 bits is equal to a quarter. It comes from the pieces of 8 that were equal to a dollar at the time. 16th century currency.

Answer 5

Before money was invented, people used to bite one another instead of paying for stuff. So if somebody asked you, "How much did Joe charge you for that haircut?", you would say "I bit him twice for it," or, in other words, "I paid him two bits."

Answer 6

Bit(money):The word bit is a colloquial reference to a specific coin in various coinages throughout the world.
click here:http://en.wikipedia.org/wiki/Bit_%28money%29#United_Kingdom_and_Commonwealth_countries