In the early years or till the 2000s, the tick sizes were determined using the fractional concept of 1 US dollar. The three main fractional values used were 1/8, 1/16, and 1/32. Due to the variations, the tick size didn't have any consistency, causing many problems for the traders in determining the spread, nominal price movement, etc.
This is why a new rule was put forth in 2005, according to which the tick size will be determined based on hundredths of the stock price. So, the tick size for a stock worth $1 will be 0.01.