Before Bitcoin there were just bits. Not the computer kind - those weren't invented yet. A "bit" was a "piece of eight" - a Spanish dollar cut into eight equal pieces to make small change. That's where the quarter got its old nickname - "two bits". Last week we had a great discussion about denominations, and there are many seemingly odd denominations (in dollars, anyway) that make more sense when seen in terms of bits, such as the common 12 1/2 cent and 6 1/4 cent obsolete banknotes (1 bit and a half bit, respectively.

We discussed the reported note denomination of "$1.56-1/4". Dave Schenkman described it as the equivalent of 25 bits and my calculator and I agreed, but I think we were off by a factor of two, as Martin Purdy pointed out. -Editor

"If a bit is 12.5c, then $1.5625 is 12-and-a-half bits rather than 25. It still seems a little odd to take an eighth of a dollar and then multiply it by another eighth of 100, but if the comment that it was a tenth of a Spanish doubloon is correct, then it makes a little more sense, in the way that sometimes only numismatics can :-)"

"I did it in my head, but facts are facts. Actually, I was thinking in terms of half bits (6 1/4¢)"

I guess I divided by two on my calculator one time too many. I had a little more time available this week and I created a table in Excel to show the translation more explicitly. I think this format is easier to digest.

Highlighted in yellow are rows representing exactly one bit and one dollar. Highlighted in grey are the key denominations of half and quarter dollar. Also highlighted are the 12 1/2 and 25 bit rows.

The $1.56-1/4 denomination is equivalent to 12 1/2 bits or 1 and 9/16th dollars.

If that amount is equivalent to 1/10 of a doubloon, then a doubloon would be 125 bits. Is that correct? -Editor