The term byte was coined by Werner Buchholz in June 1956,[a] during the early design phase for the IBM Stretch computer, which had addressing to the bit and
variable field length (VFL) instructions with a byte size encoded in the instruction.
It is a deliberate respelling of bite to avoid accidental mutation to bit.
Another origin of byte for bit groups smaller than a machine's word size (and in particular groups of four bits) is on record by Louis G. Dooley, who claimed he coined the term while working with Jules Schwartz and Dick Beeler on an air defense system called SAGE at MIT Lincoln Laboratory in ca. 1956/1957, which was jointly developed by Rand, MIT, and IBM. Later on, Schwartz's language JOVIAL actually used the term, but he recalled vaguely that it was derived from AN/FSQ-31.
Early computers used a variety of four-bit binary coded decimal (BCD) representations and the six-bit codes for printable graphic patterns common in the U.S. Army (FIELDATA) and Navy. These representations included alphanumeric characters and special graphical symbols. These sets were expanded in 1963 to seven bits of coding, called the American Standard Code for Information Interchange (ASCII) as the Federal Information Processing Standard, which replaced the incompatible teleprinter codes in use by different branches of the U.S. government and universities during the 1960s. ASCII included the distinction of upper- and lowercase alphabets and a set of control characters to facilitate the transmission of written language as well as printing device functions, such as page advance and line feed, and the physical or logical control of data flow over the transmission media. During the early 1960s, while also active in ASCII standardization, IBM simultaneously introduced in its product line of System/360 the eight-bit Extended Binary Coded Decimal Interchange Code (EBCDIC), an expansion of their six-bit binary-coded decimal (BCDIC) representation used in earlier card punches.
The prominence of the System/360 led to the ubiquitous adoption of the eight-bit storage size, while in detail the EBCDIC and ASCII encoding schemes are different.
In the early 1960s, AT&T introduced digital telephony first on long-distance trunk lines. These used the eight-bit µ-law encoding. This large investment promised to reduce transmission costs for eight-bit data.
The development of eight-bit microprocessors in the 1970s popularized this storage size. Microprocessors such as the Intel 8008, the direct predecessor of the 8080 and the 8086, used in early personal computers, could also perform a small number of operations on the four-bit pairs in a byte, such as the decimal-add-adjust (DAA) instruction. A four-bit quantity is often called a nibble, also nybble, which is conveniently represented by a single hexadecimal digit.
The term octet is used to unambiguously specify a size of eight bits. It is used extensively in protocol definitions.
Historically, the term octad or octade was used to denote eight bits as well at least in Western Europe; however, this usage is no longer common. The exact origin of the term is unclear, but it can be found in British, Dutch, and German sources of the 1960s and 1970s, and throughout the documentation of Philips mainframe computers.