What is one bit?

Jewelry Discussion
1 
Two bits is a quarter dollar.....but what is one bit?  (The US, by the
way, was the first country in the world to adopt a metric system for
its currency.)

One bit is an eighth of a Spanish dollar, a coin widely used in the
Southeast and elsewhere back in the 17 and 18 hundreds, when all
paper money was issued by banks of dubious character, and there were
no American or British coins to be used. (British taxes and mercantile
policy effectively drained coins and other forms of ready case out of
the colonies, and the US didn’t coin money until well into the 19th
century, I think ???.) The Spanish dollar (from Austrian “thaler”)
was the unofficial standard, partly because the Spanish coins were
were widely available, and widely trusted as to purity and value, etc.
I think they were silver. At any rate, they were too valuable for
most purchases for which American used them, so they cut them into 8
pieces, each called a bit.

Dian Deevey

2 
 and the US didn't coin money until well into the 19th century, I
think ???.)

I think your explanation is about right, but the US did coin money in
the early 1800s (remember the very rare 1804 silver dollar?), and
there is even some colonial coinage from the 1700s. There probably
wasn’t much of it, given how rare it is today, but there was coinage.

Roy

3 
    most purchases for which American used them, so they cut them
into 8 pieces, each called a bit.

Also called a “piece of eight”. It might also be noted that there are eight bits to a byte.