I always thought the 1/8 ratio of bit/dollar was the inspiration for the bit/byte naming scheme, but I can't seem to find any evidence for this in my admittedly limited research.

Wikipedia claims that the bit stands for Binary digIT, which would mean that either that's a bacronym (since I assume 8 bits/byte wass chosen for a reason other than an analogy to currency).

Is this just a weird coincidence?

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    What’s your source for 1 bit = 1/8 of a dollar? Fractional dollars (1/2, 1\8) were the units in which stock exchanges and the Wall Street Journal expressed stock prices before tthe digital age.
    – Xanne
    Commented Sep 4, 2019 at 6:10
  • 3
    – k_g
    Commented Sep 4, 2019 at 6:12
  • "2 bit" is still a common expression in the US (meaning "low quality") as is the phrase "shave and a haircut, 2 bits" (mostly for the beat pattern)
    – k_g
    Commented Sep 4, 2019 at 6:13

1 Answer 1


According to Etymonline the computer related term bit is the short for “binary digit” but the choice of this word may have been influenced by its more original meaning.


small piece," c. 1200; related Old English bite.

Money sense "small coin" in two bits, etc. is originally from the U.S. South and the West Indies, in reference to silver wedges cut or stamped from Spanish dollars (later Mexican reals); transferred to "eighth of a dollar."

Bit : computerese word,

1948, coined by U.S. computer pioneer John W. Tukey, an abbreviation of binary digit, probably chosen for its identity with bit.

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    It may be noteworthy though, that a byte, certainly in the old days, was not always 8 bits, but could be 4, 6, 10 or even another number.
    – oerkelens
    Commented Sep 4, 2019 at 6:11
  • @oerkelens: I have written code a long time but never encountered non-8 bit bytes. There is in my mind no question that any American hearing the term "bit" used in computer context would have in the days when a quarter was real money (you could buy a McDonalds fish sandwich in 1967 for 15 cents) would have instantly seen a connection twixt the older monetary meaning and the new compsci term even if some bytes were not 8 bits long. It is interesting to speculate if bytes now almost always (always?) being 8 bits long was influenced by monetary usage.
    – releseabe
    Commented Nov 18, 2022 at 13:04

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