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"to bite gently," c.1500, perhaps from Low German nibbeln "to nibble, gnaw," related to Middle Low German nibbelen, Middle Dutch knibbelen "to gnaw," source of Dutch knibbelen "to cavail, squabble." Related: Nibbled; nibbling.
1650s, "act of nibbling," from nibble (v.). As "a small bite," from 1838.
/nib'l/ (US "nybble", by analogy with "bite" -> "byte") Half a byte. Since a byte is nearly always eight bits, a nibble is nearly always four bits (and can therefore be represented by one hex digit).
Other size nibbles have existed, for example the BBC Microcomputer disk file system used eleven bit sector numbers which were described as one byte (eight bits) and a nibble (three bits).
Compare crumb, tayste, dynner; see also bit, nickle, deckle.
The spelling "nybble" is uncommon in Commonwealth Hackish as British orthography suggests the pronunciation /ni:'bl/.