The Ultimate Coin Collector’s Guideadmin2024-01-30T14:47:01+00:00
Coins are known to be one of the first ‘collectibles’ of the world. While the exact origin of coin collecting is not known, the hobby is said to have prevailed even before the 3rd century BC. While investment has been one of the main objectives behind coin hoarding, it is the art-work that has turned many art-lovers into coin-collecting-aficionados. With the birth of numismatics, new dimensions to the “King of Hobbies” opened up. And today, coin collection is said to be one of the most popular and widespread passions. This write-up aims to include various aspects and information about coin collecting, that can be of use to a collector.
There can be varied motives behind accumulating coins. There are essentially 3 kinds of collectors:
Hobbyists – A vast majority of coin-collectors around the world, are hobbyists. Among them, there are those, who collect coins just for the fun of it, and those, who are quite serious about this hobby. Some of them collect all kinds of coins while others gather coins only of a particular type. Generally, what starts off as fun, might slowly grow into a passion with specific tastes. People collect coins based on a particular era, a particular year of minting, originating country, print or subject on the coins and even metallurgical composition. However, there are several coin collectors, who’s objectives are beyond mere hobby.
Numismatists – Numismatists study coins. Hence their interest in coin-collecting is academics-oriented. Coins of a particular period reflect a wealth of information of that period, like, the way of living, the mind-set of the people, their language, their idea of precious metals and more. Ancient coins are considered as mirrors of history. Studying them can thus reveal historical facts.
Investors – Many of the collectors have an investing-motive behind coin collection. They buy rare coins, especially gold coins and silver coins. If the prices of the coins go up, they sell them. Sometimes ancient and rare coins, despite being made of ordinary metal, are priced high too. Investors, thus need to have an in-depth knowledge about coins, their prices, the market, grading and more.
Coin collection is said to have existed since the time they were first minted. Long ago, coin collecting was done with the motive of storing wealth. It is reportedly much later, that coin gathering became a form of art collection. Certain reliable historic records mention that coins were accumulated for their artistic value from as early as the 4th/3rd century B.C. However, only the kings and the wealthy people of those times, are known to have indulged in this hobby.
Even during the Renaissance of the 14th-17th centuries, coin collection was popular only among the privileged class. Hence, it came to be known as the “hobby of kings”. Modern coin collecting is said to have taken birth during the 14th century. In the 15th and 16th centuries, artists are said to have been employed for replicating some of the ancient valuable coins, so that they could be used as collectibles. However, this replication also led to duplication. Hence, there arose a need to study coins, to recognize the authentic and the fake ones. During the 17th and 18th centuries, coin collection took a scholarly bendand numismatics came into being. Slowly the middle class people
starting showing interest in coin collection.
It was not until the 19th century that this hobby became popular and widespread. Markets for trading coins started emerging and so did regulatory bodies and associations. Publishing of periodicals had also started during these times. Coins made of precious metals and ancient coins assumed the form of investment during the 20th century. Even to this day, gold, silver and platinum coins are traded as bullions all over the world.
1st Century BC – Roman Emperor, Caesar Augustus, collected old, exotic coins, which he gifted to friends and courtiers. This has been related in the De Vita Caesarum, a work by Suetonius, a Roman historian.
1294 – A manuscript dating to this period cites the collection of coins in an Italian monastery. This has been quoted by French numismatist, Ernest Babelon, in his work ‘Traité des monnaies Grecques et Romaines’ in 1901.
14th Century AD – Italian humanist, Petrarch, who rose to fame during the Renaissance, collected ancient coins. He is considered to be the first of his times to pursue the hobby.
1514 – The first book on coins, De Asse et Partibus, by Guillaume Budé was published.
April 2, 1792 – The Congress created the United States Mint.
August 15-18, 1962 – The first numismatics convention was conducted by the Royal Canadian Numismatic Association and the American Numismatic Association, at Detroit, Michigan. The attendees numbered to 40,000.
1970 – UNESCO passed a resolution that coins and other such articles which are more than 100 years old must be treated as cultural property, and hence control must be exercised in importing, exporting or trading them.
1980-90 – Towards the late 1980s and early 1990s, ancient coin collection investment funds started to trade in the New York Stock Exchange.
4. Metallurgical Composition of Coins
There are various elements that have been used for making coins. Some of them are: Copper, Zinc, Nickel, Gold, Silver, Aluminium, Iron, Lead, Magnesium, Manganese, Palladium, Platinum, Tin and Tungsten. However, coins are generally made of alloys, or a mixture of these elements.
Current circulating US coins compositions:–
Pennies (one cent coins) are made from copper plated zinc.
Quarters are made from nickel plated copper.
Dollars were initially made of silver and gold. Silver Dollars were being made since the 18th century. They are still minted, but are mostly uncirculated. Gold Dollars were popular during the 19th century. During the latter part of the 20th century, copper and nickel compositions were used for making Dollars. Since 2000, manganese and brass compositions have been used. Half Dollars are also made from copper and nickel.
Collectors coins and bullions are made from gold and silver. These metals are usually mixed with a definite proportion of some other metals, and are not used in their pure forms.
Note: During World War II (1943), pennies were made from zinc plated steel, since copper was extensively being used for making shell casings for the war.
Certain metals are strictly NOT used in coin making. This is because they are highly reactive or unstable, or very expensive to separate from their naturally occurring states, or highly brittle or soft. Some of these metals are: Lithium, Sodium, Potassium, Rubidium, Caesium, Beryllium, Calcium, Barium, Cadmium, Boron, Scandium, Lanthanum, Gallium, and Arsenic.
Knowing the proper terms for parts of a coin will gain you a lot of respect with coin dealers and other collectors. The obverse is the “heads” side of the coin and the reverse is the “tails” side. The legend is the inscription on the reverse of the coin; the rim is the raised circle near the edge of the coin; and the motto is the inscription on the obverse of the coin. (The motto on US coins is “In God We Trust.”)
Other common parts of a coin include the date, the year the coin was minted and the mint mark (the letter designation under the date on a US coin that denotes where the coin was made). Coins made of multiple metals, such as the US quarter, are called clad coins and you can see the layers on the side of the coin. Coins with ridges on the sides are said to have reeded edges.
The metals used in coin making are heated in a furnace so that the mixture becomes molten. This is then poured into a mould and allowed to cool. The mould is usually cuboidal in shape. The solidified metal bar, called ingot, is then passed through a roller several times, till it is pressed into a strip, called coil, having the thickness of the final coin. The strip is then passed into a blanking press, where small circular discs are punched through it. These discs are called blanks. The punched strip is cut into pieces and sent for recycling.
The blanks are softened by heating in an annealing furnace. They are then washed and dried, so that any leftover grease and dirt is removed. The clean blanks go through a riddler, which separates the imperfect blanks from the lot. The imperfect ones are sent back for recycling. The good ones are passed through the upsetting mill, which raises the rim along the edges of the blanks.
The blanks are now ready for the coining press, where the designs are struck onto them, one at a time. There are 2 dies involved in the striking. One for the design on the obverse side and one for the reverse side. The blanks thus become coins.
The coins are inspected manually. They are then counted using an automated counter, packed, sealed and sent off for storage or to the 12 Federal Reserve Banks. From here, the coins are shipped to the local banks.
Note: The U.S. Mint buys readymade strips or coils for minting the coins. For the manufacture of cents, the U.S. Mint directly buys blanks from the fabricators. The raw materials (metals) are supplied by the Mint itself.
Coin grading is assigning a grade to a coin to certify its worth. With coin collection being one of the oldest and most popular hobbies globally, there had to be some means of distinguishing between authentic and duplicate coins, and also rating them according to their value. Hence coin grading came into existence. There are essentially 4 types of coin grading. They are:
Grading based on Quality – This kind of grading has evolved from just 2 words (new and used) to an entire system with grades ranging from 1 through 70. Along the course of this evolution, there was a time when grades like Poor, Fair, Almost Good, Good, Very Good, Fine, Very Fine, Extra Fine, Almost Uncirculated and Brilliant Uncirculated were awarded. During the late 1950s, William H. Sheldon published a book titled Penny Whimsy, in which he came up with a scale for grading coins. This scale came to be known as the Sheldon scale. It described coin quality with numbers ranging from 1 to 70. 1 indicated basal state or extremely poor condition and was awarded to bent/scarred/oxidized coins. 70 denoted perfect condition and was awarded to uncirculated or mint state coins.
Grading based on Interest – Coins are rated based on the interest factor as well. This indicates how much the coin or its variety is in demand. The ones in higher demand obviously get better grades.
Grading based on Rarity – There are 3 well known scales for indicating rarity of coins – the Sheldon Rarity Scale, the Universal Rarity Scale and the Scholten scale. In the first one, ranging from R1 to R8, R1 denotes a common coin and R8 denotes a unique one. The second scale runs from URS 1 to URS 20, where URS 1 indicates unique and URS 20 indicates availability in numbers ranging from 250,001 to 500,000. The third scale uses the following notations – C for common, N for normal, S for scarce, R for rare, RR for very rare, RRR for extremely rare and RRRR for utmost rarity.
Grading based on Liquidity – This grading with a scale ranging from 1 to 5, indicates how easily a coin (or its variety) can sell when auctioned, with normal market conditions prevailing. 1 indicates that the coin will sell fast and at a discounted value than the suggested price. 5 indicates that the coin will sell really fast and at hiked-up values.
A few grading services have been set up for awarding grades to rare coins. They charge a fee for doing so. Once a coin is sent to them, they will grade it and usually seal it in a plastic case. The 4 most popular grading services are:
American Numismatic Association Certification Service (ANACS) Investment Grade Coin (IGC)
One important thing to note is that the grades awarded could vary from service to service. Sometimes submitting the same coin to the same service twice can result in two different grades, maybe with a slight difference. However, these 4 services are considered to be credible for grading coins.
Hobbyists usually get coins from loose pocket change, or by trading them with friends. The serious coin collectors, get their stock from coin dealers, coin shows and auctions. Initially coin dealing and trading happened on a face-to-face basis. However, with the advent of social networks and online trading, transactions happen virtually, and the coins are then posted to the buyer’s address.
10. Precautions to be Taken When Buying Coins
When buying rare coins it is advisable to do the necessary homework on the coins as well as the dealer. Getting to know the price of the coin of interest and its grade can be helpful. Also gathering as much information as possible about distinguishing between authentic and duplicate coins can be highly advantageous. Special care needs to be taken when buying coins online. It is best to buy from trusted and reputable dealers. One can even compare various shops to find the best buy.
Like antiques and collectible books, coin collection can stay as fresh as new if cared for properly. First of all, get in the habit of handling your coins by the edges, never by touching the face of the coin. Avoid touching your coins at all, if you can help it, as skin oils and fingerprints are the number-one threat to your coin’s value. If your coins are in mint set packaging or in plastic capsules, you should keep them sealed inside.
It is not recommended that you clean your coins. Similar to antique furniture, coins develop a patina or luster. Polished coins are actually worth less than un-cleaned coins, in most cases. The exception would be coins that have been dug up or found using a metal detector.
Proper storage and display is key to preserving the value of your coin collection. Coins can be stored in air-tight containers. However, the better way to store and display them is by using mylar (a stable plastic) coin holders, called “flips.” These pockets have two openings – one for the coin and one for a piece of cardboard or paper that describes the coin. Avoid older plastic coin albums made with polyvinyl chloride (PVC) as these will corrode the coins over time. Also avoid holders and albums that do not have a flap or cover, as these can cause coins to fall out of the holder when it is handled.
Of course, proof and mint sets come in their own display packaging and these shouldn’t be tampered with, so as to preserve the set’s value. Similarly, coins that have been graded and sealed should be left in their plastic cases.
13. Coin Collecting Software
Several coin collecting software are available in the market for making coin collection simple and easy. It is quite surprising that there are software to help people when indulging in their hobbies. However, these software can really come in handy for taking care of the entire coin collection process. Some generic features of these applications are:
A centralized database that keeps a record of a number of coins, both contemporary and ancient. Details such as grading descriptions, market value, the manufacturing mint, country, images and more might as well be provided. This can help coin collectors get exact details of the coins they are interested in.
Some of the software vendors even encourage their customers to send them details of any coin that is not present in their database. The details will then be verified and added.
Users can maintain an account for keeping track of the coins they already have.
Some of these apps are free, while others require paying a fee. One thing to note is that, the free apps might offer a limited set of features, while the paid apps might be full-fledged.
Most of these software come with a free trial period too.
14. Collecting United States Mint Coins
US Mint Coin Sets of 2011
Numismatic products from the U.S. Mint include proof and uncirculated sets for each year, commemorative coins in honor of events, places, people etc., Eagle proof coins made of platinum, gold and silver, national medals and other special collectibles.
Boy Scouts below 18 years of age, with a hobby of collecting coins, can aspire for the Coin Collecting Merit Badge. However, there are a few criteria that need to be met before applying for the badge. They are:
1. A Boy Scout is expected to have a collection of the 50 States Quarters and should also be able to describe them.
2. He should know details like how coins are made, coin terms and their meanings, information on coin grading, coin storage methods, information about coin collecting publications and information about paper currency.
3. The aspirant should as well build a circulation type set (one each of the currently circulating coins).
4. Apart from these, he should fulfill at least one of the following criteria:
Make a type set of a particular coin, with one coin per year, since his birth.
Collect and identify 50 coins from 10 different countries.
Collect and identify 20 foreign currency notes.
Collect and identify 15 different medals or tokens.
5. Finally, the Boy Scout should also meet one of these requirements:
He should be able to draw 5 Colonial-era United States coins
Visit either a US Mint facility, or a Federal Reserve Bank or the Bureau of Engraving and Printing and give an account of it to the counselor.
Give a speech on coin collecting before his class or troop.
Visit a coin dealer or the US Mint website or a coin collecting club and give an account of his experience.
16. Facts about Coins
You know that coins can be fascinating and fun, but not everyone understands the appeal of coins. Here are a few fun coin facts about them:
Legend maintains that Martha Washington, George Washington’s wife, donated her table silver flatware to make the first US coins.
The inscription, “In God We Trust” was first added to US coins during the Civil War. It wasn’t used on all US coins until 1955.
The world’s largest mint is located in Philadelphia, which has housed a US mint since 1792. The complex covers more than five acres and welcomes more than 400,000 visitors each year.
Circulating coins have a lifespan of around 30 years compared to around 18 months for paper money.
Coins with reeded (or grooved) edges are more difficult to copy.
In 1943, because copper was needed for the war effort, US pennies were made of zinc and had a silvery appearance.
A US nickel is made of only 25 percent nickel. The rest is copper.
17. Valuable Rare Coins
The world of numismatics is filled with legends and stories that can captivate both the seasoned collector and the curious onlooker. Here are some of the most iconic and sought-after coins that have left their mark on the history of coin collecting:
1. The 1909-S V.D.B. Lincoln Cent
This coin is a noteworthy specimen, not just for its rarity but also for the unique identifiers it carries. The initials “V.D.B.” found at the bottom are those of the coin’s designer, Victor David Brenner. At the time of its release, there was public outcry about the prominence of Brenner’s initials, leading to a limited mintage. This short-lived design has made the 1909-S V.D.B. Lincoln Cent a favorite among collectors. Its value can vary widely depending on its condition, but in average circulated grades, it can be worth several hundred dollars. In pristine, uncirculated (Mint State) condition, especially higher grades, its value can reach into the thousands of dollars or more.
A coin shrouded in mystery and intrigue, the 1913 Liberty Head Nickel is the stuff of numismatic legend. Its backstory is fascinating: It was minted without the authorization of the U.S. Mint, leading to its extreme rarity. Only five specimens are known to exist today. Their limited existence, combined with the mystery of their unauthorized mintage, has placed the 1913 Liberty Head Nickel among the pantheon of the most coveted coins. Given that only five are known to exist, and their ownership histories are well-documented, the prices realized at auction can be staggering. In the past, some specimens have sold for over $3 million, and their values could potentially be higher depending on the specific coin’s grade and the circumstances of the sale.
This gold coin’s story is a tale of ambition and oversight. Originally minted as a regular issue coin, the majority of the 1933 Saint-Gaudens Double Eagles never made it into circulation. Instead, they were recalled and melted down as part of the U.S. government’s effort to stabilize the gold market during the Great Depression. However, a few of these coins managed to escape the mint, adding an element of rebellion to their lore. Their beautiful design combined with their scandalous history has turned the 1933 Saint-Gaudens Double Eagle into one of the most legendary coins in the world of collecting. A 1933 Saint-Gaudens Double Eagle achieved a record price of $18.87 million at a Sotheby’s auction in June 2021, making it the most valuable coin ever sold at auction at that time. This surpassed the previous record set by a 1794 Flowing Hair Silver Dollar.
Recognized as one of the first dollar coins issued by the United States federal government, the 1794 Flowing Hair Dollar is renowned for its beauty and rarity. Its iconic design showcases Lady Liberty with flowing hair, symbolizing freedom. Because it represents the inception of the U.S. silver dollar, it’s of immense historical significance, adding to its demand among collectors. A specimen of the 1794 Flowing Hair Dollar set a world record for any coin at auction, realizing a price of over $10 million in January 2013. This particular coin was believed to be among the earliest, if not the first, struck by the U.S. Mint and was in exceptional condition.
This coin is one of the rarest pennies ever minted. Its limited production run and the fact that few have survived in mint condition have made it a sought-after gem among numismatists. The design showcases Lady Liberty wearing a Native American headdress, representing the nation’s indigenous heritage. While the coin does represent an attempt to honor the nation’s indigenous heritage, there has been some criticism of the design over the years. Some argue that it was a misrepresentation or oversimplification of Native American culture and features. Depending on its condition, the 1877 Indian Head Penny can be valued from a few hundred dollars for circulated examples to over $15,000 for those in pristine condition, with exceptional specimens fetching even higher prices.
Due to the need for copper during World War II, pennies in 1943 were made out of steel. However, a very limited number were mistakenly minted in copper, making them some of the rarest and most valuable coins in U.S. history. Their accidental minting and the historical context make them especially intriguing. The 1943 Copper Penny retains the familiar design seen on many U.S. pennies of the era. On the obverse side, it showcases a prominent profile of Abraham Lincoln, facing to the right, with the word “LIBERTY” inscribed to the left and the year “1943” just below Lincoln’s profile. Above Lincoln’s head is the national motto, “IN GOD WE TRUST.” The reverse side features the iconic design of the Lincoln Wheat Penny: two stalks of wheat, one on each side, framing the inscriptions “ONE CENT” and “UNITED STATES OF AMERICA.” Above the wheat stalks, the Latin phrase “E PLURIBUS UNUM” is inscribed. Some 1943 Copper Pennies have sold for significant sums. Given its rarity, the 1943 Copper Penny can fetch upwards of $200,000 or more, depending on its condition, with the most pristine examples demanding even higher prices.
Often referred to as the “King of U.S. Coins,” the 1804 Draped Bust Silver Dollar is shrouded in mystery. Though dated 1804, it wasn’t minted until decades later, making it an enigma in the numismatic community. Its elegance and the stories surrounding its origin have made it an iconic piece among collectors. The 1804 Draped Bust Silver Dollar features a profile portrait of Lady Liberty, facing right. She wears a loose-fitting draped garment that flows down her neck and shoulders. Her hair is elegantly styled, bound by a ribbon, with some locks cascading down the back of her neck. Above her image, the word “LIBERTY” is inscribed, and the year “1804” is minted below her profile. The reverse side of the coin presents an eagle with outstretched wings, perched on a cloud. It clutches arrows in one talon and an olive branch in the other. The words “UNITED STATES OF AMERICA” encircle the eagle along the coin’s rim, with the denomination “ONE DOLLAR” minted below the eagle. Given its legendary status and extreme rarity, the 1804 Draped Bust Silver Dollar can command prices well into the millions, with certain examples fetching over $3 million depending on their condition and provenance.
This is a gold coin that was minted by the United States from 1907 to 1933. The design features a full-length figure of Liberty, portrayed by Augustus Saint-Gaudens, where she holds a torch in her right hand that symbolizes enlightenment, as well as an olive branch in her left hand that represents peace. Behind her is the U.S. Capitol and rays of sun. The reverse side of the coin shows a young eagle flying during a sunrise. It is important to note that the U.S. Mint has released modern versions of the Saint-Gaudens Double Eagle design, particularly for bullion coins. The design has been adapted for use on the American Gold Eagle, the U.S. gold bullion coin that was introduced in 1986. Eagles in circulated condition are often valued somewhat over the current price of gold, but rarer dates and higher-grade examples can command prices ranging from several thousand dollars to well into the six figures.
[1943 substitute, as no Creative Commons licensed image of the 1916 coin exists]
Among Mercury dimes, the 1916-D is considered the rarest and is especially sought after by collectors. The Mercury dime showcases a depiction of Liberty with wings in her hair, symbolizing freedom of thought. The 1916-D is particularly rare because of its low mintage. Finding one in good condition is a treasure for numismatists. Well-worn examples of the 1916-D might fetch between $900 to $1,500, those in extremely fine condition can command values between $15,000 to $30,000, and pristine, uncirculated specimens can be worth $40,000 to over $100,000, depending on their exact grade.
This $5 gold coin is one of the rarest in U.S. coinage history. Of the original mintage, only three specimens are known to exist today, and one of them is held in the National Numismatic Collection at the Smithsonian Institution. The rarity of the 1822 Half Eagle combined with its storied history makes it one of the most coveted coins among collectors. The 1822 Half Eagle boasts a design characteristic of early 19th-century U.S. coinage. On its obverse, the coin features a left-facing profile of Lady Liberty, wearing a cap adorned with the word “LIBERTY.” Around her portrait is a circle of 13 stars, representing the original 13 colonies, with the year “1822” inscribed below. The reverse side of the coin showcases a striking heraldic eagle design, a symbol deeply rooted in American iconography. The eagle is portrayed with outstretched wings, clutching arrows in one talon and an olive branch in the other, signifying the nation’s strength and desire for peace. In recent years, when one of these coins has appeared at auction, it has garnered prices in the multi-million-dollar range, with valuations potentially ranging from $5 million to $10 million or more, depending on the specific circumstances of the sale and coin condition.
It is important to note that values of rare coins can fluctuate based on the condition, provenance, and the current market demand. To obtain the most recent valuation for a specific coin, one should refer to the latest auction results.
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