Introduction

Numismatics is the study of money used throughout the history. The study involves analysis of physical characteristics of objects of interest, place of manufacture, year of production, way of manufacturing while also considering political, economic, and historical environment associated with the time of production.

Although numismatics is usually used to refer to the collecting of coins and banknotes, it should be noted that numismatics encompass the research and collecting of items such as various forms of early paper money, tokens, medals, bullion rounds, etc.

The English term “numismatic” was first used in 1829 and was borrowed from the French word “numismatique”. The term although originates from the Latin word “nomisma” meaning “coin”.

History of numismatics

Roman emperor Antoninus Pius depicted on a coin

The earliest recorded practice of collecting coins was during the reign of ruler Caesar Augustus, who apparently collected coins of every kind from foreign lands, which he gave as gifts to other rulers of foreign lands in order to facilitate trade agreements.

Some of the most notable coin collectors included Pope Benedict VIII, King Henry IV of France, and Emperor Maximilian of the Holy Roman Empire. It explains origin of why the practice of coin collecting was referred to as the “hobby of kings”, since it was associated with kings, emperors, and nobility.

During the 19th century, coin collectors started organizing themselves in professional societies, which also published journals to document coins found within their territories such as Royal Numismatic Society in England or American Numismatic Society founded in New York City in 1858. Other numerous professional societies dedicated to the numismatic research and studies were also established all around the world.

In early history, money was usually made out of some scarce material or precious metals such as gold or silver, making it a rare commodity. This facilitated trade over a larger geographic area since precious metals were widely recognized as a store of value.

However, as time progressed, the transportation of large amounts of coins became inconvenient and burdensome due to their bulkiness and the risk of loss, necessitating the transition from coins to paper money, which was lighter and more convenient to carry. To help facilitate trade in smaller geographic areas, the issuance of paper money became popular. To date, paper money remains one of the most popular forms of physical money.

Nevertheless, gold and silver are stored by banks and other financial institutions as a store of value.

Although numismatists are usually focused on the physical attributes of the coins, their research also involves studying the production of coins. Research covers the varieties, mintage figures, mint made errors, as well as social, political and economic circumstances present during the time of coin minting.

In addition to acquiring coins from across the globe, modern communication methods and internet have enabled collectors to more easily research the history of coins and share knowledge with each other. Also numerous numismatic clubs and societies where established all over the world for the same purpose.

Specialized studies or the sub-fields of numismatics include exonumia, notaphily and scripophily.

Exonumia

The Great Wall of China depicted on Beijing Language Institute medallion

Exonumia is the study of coins or coin like objects such as tokens, medals, military awards i.e. objects that were used for commerce or issued as a commemorative mementos. Medals and awards are usually classified by the event they commemorate.

Notaphily

The portrait of Russian Tsarina Catherine II a.k.a “Catherine the Great“ depicted on a 100 Rubles banknote from 1910. Russian empress is remembered as a great patron of art, her invaluable contribution and presiding over the age of “Russian Enlightenment“ resulted in formation of one of the greatest art collections ever assembled that subsequently laid foundation for the famous Hermitage Museum in Saint Petersburg we know today.

Notaphily is the study of paper money or banknotes. Numismatists have been collecting paper money since its introduction as a form of physical currency by governments around the world. There is a wide variety of paper currency that has been issued as a form of payment by banking institutions and national governments.

Scripophily

Scripophily refers to the study and collection of securities, such as stock certificates and bonds. Numismatists collect stocks and bonds due to their interesting historical contexts and their artistic beauty. A lot of people collect them because of beautiful engravings on them. Old bonds and stock certificates are considered by collectors as intricate works of art with great historical significance and are valued as such.

Factors that influence coin price and value

The coin market is intricate and complex as many factors influence coin prices and values. The following are the significant factors that determine the values and prices of coins.

• Mintage

• Survival rate

• Demand

• Intrinsic value

• Condition

Mintage

The primary influence on the value or price of a coin is the overall number of produced coins during certain period of time. That is in direct correlation with the availability for people to obtain them. The total possible supply available to the market is determined by the initial mintage of that coin. Once a production over a certain period of time is completed, the supply of that coin is fixed and therefore limited by the amount of coins produced. In the case of low mintage numbers for particular coin, that coin would be presumably harder to obtain than if it was the case of it being produced in very large numbers.

Survival rate

Over time some coins are removed from circulation because they get overly worn. In some instances, coins are melted if their intrinsic metal value is significant. This happened to many silver and gold coins over the course of time. Finally, some coins just get lost over time. All of these factors affect overall “survival rate” of specified coins.

Demand

A lot of factors influence demand for a particular type of coin. While rarity being one of most important things to consider, other aspects have also to be taken in account, which impact our decision on trying to obtain that particular coin. Attractiveness of a coin can be manifested in various forms, such as overall condition, historical significance, likeability of a person depicted on the coin, place and year of issue, quality of production, coins with errors created during minting process, how well would certain coin complement collection that is popular among collectors, just to name a few. All of these factors should be considered when trying to predict demand for specific coin.

Intrinsic value

Intrinsic value of the metal contained within the coin can be a major factor in determining the value and price of it, especially if the coin is made from a precious metal such as gold or silver. For example, large number of US coins minted before 1965 had significant percentage of silver content in their composition, so as the price of silver fluctuate, price and value of coin will consequently change. This is not limited to just precious metals. Price of copper and nickel as base metals in our current coinage is also susceptible to fluctuations in the market, affecting the value of the coin accordingly.

Condition

“Condition is everything”

It is very important to emphasize significance of condition of coins for collectors and its impact on determining the value of coin. There is an old maxim that states “Condition is everything”, noting the importance of paying attention to and implying that collector should seek to find coins in finest condition possible. As the “used coins” are prone to wear and other potential damages that may occur during their time in circulation (i.e. possibly reducing their value significantly) collectors should therefore focus on obtaining “uncirculated coins” or coins in a best condition they can find, as that plays a crucial role in determination of the value of a particular coin. Well preserved coins are always in demand on the market.

Coin Grading

Coin grading is one of the key elements in determining an accurate value of a coin.

The foremost purpose of grading a coin is to determine the coin’s market value. Value of a coin is dependent on how well the coin was struck initially, coin’s level of preservation, and how much wear and damage the coin has sustained over time. It is imperative to know and to be able to evaluate the amount of wear on a coin and where it fits on the Sheldon Scale, 70-point scale that is widely accepted for use in grading coins.

Coin grading is not an exact science, it is an opinion based upon a standard definition that most numismatists would agree with. The size and position of the imperfection and its effect on appearance is where one person may grade the coin with the higher grade and another person to grade the same coin with the lower grade. The differences come in when minor details in a coin’s appearance are sufficient enough to push it to a higher or lower grade. Awareness to subtle details is part of the art to grading a coin’s condition.

The 70-Point Coin Grading Scale i.e. Sheldon Scale

Coins are graded on a Sheldon Scale, 70-point grading scale with 1 being the worst condition and 70 being perfect mint state. Moreover, coin grading is done both by adjectives and on a 1-70 numeric scale, so Sheldon Scale ranges from lowest grade of Poor (P-1) to a highest possible grade of Perfect Mint State (MS-70). Standard for coin grading is developed so that most collectors will be able to agree on how a coin should look given how the coin’s grade is described.

Numeric grades

• Poor (PO-1)

• Fair (FR-2)

• About Good (AG-3)

• Good (G-4, 6)

• Very Good (VG-8, 10)

• Fine (F-12, 15)

• Very Fine (VF-20, 25, 30, 35)

• Extremely Fine (XF-40, 45)

• About Uncirculated (AU-50, 53, 55, 58)

• Mint State (MS 60-70)

It is important to note that the above grades are independent of the age of the coin.

Strike types

• Mint State (MS) – Coins struck in the same format as circulation issues. Applies to grades 60 to 70.
• Proof (PF) – Coins struck in a special format for collectors.
• Specimen (SP) – A hybrid between Mint State and Proof.

Proof (PR)

A Proof (PR) is a coin usually struck from a specially prepared coin die on a specially prepared planchet. Proofs are usually given more than one blow from the dies and are usually struck with presses operating at slower speeds and higher striking pressure. Because of this, Proof (PR) usually exhibits much sharper detail than regular strikes. PCGS (Professional Coin Grading Services) recognizes Proof (PR) coins as those struck in 1817 and later.

Proof (PR) designations pertain only to Proof (PR) coins and are based primarily on certain factors such as existence of contact marks, hairlines, quality of luster or eye appeal etc. which on the other hand, depend on quality of production, handling, and storing of a coin over the course of time.

Specimen (SP)

A Specimen (SP) is a non-proof coin, minted in order to be sold to collectors or for presentation purposes, and was not intended for circulation. These special coins where struck at the mint from 1792-1816 and although they display many characteristics of the later Proof (PR) coinage, they still lack the high standard of finish Proof coinage possess.

Numismatic accessories

In order to properly start a coin collection there are a few basic and essential items you need to have. As your knowledge of expands, you will find that there are other, very useful items that would greatly help you in your activity for proper identification of coins. This is especially true with certain instruments with which we are able to determine precisely composition of metals in a coin such as XRF analyzers etc. One of the major issues with these analyzers is their high price, although for a very serious collector it constitutes an indispensable “tool of the trade” as it allows us precise, fast and most importantly reliable measurement of composition of the coin analyzed. That is extremely important in order to determine the authenticity of a coin and is used extensively by coin dealers and authentication/appraisal services.

Essential accessories for coin collecting

• Gloves

• Digital weight scale

• Digital sliding gauge

• Magnifier

• Coin albums and folders

• Coin holders and coin flips

• Reference literature

Very useful accessory in coin collecting

• XRF analyzer

Gloves

Cotton gloves should always be used when handling coins as they keep the residue found on fingers from transferring to the coin. Gloves protect a coin’s surface from the natural oils on our skin that react with the metal and can inevitably cause corrosion over time. This is especially important in the case of valuable coins, where improper handling can have significant impact on their condition consequently decreasing their value. Cotton gloves are the main choice of collectors since they are soft, comfortable, a non-reactive with metal and can be laundered when needed.

Digital weight scale

A digital weight scale is essential instrument for proper identification of coins as it can help you spot fake coins. Knowing the weight of your coin is one of the most important measurements for coin identification. All coins have a specific weight range and if it is outside that range there is a very good chance that the coin is a fake. Apart from that, digital weight scale is also necessary in determining precise bullion value of your coin. I would highly recommend digital weight scale with accuracy of at least 0.01g. Luckily digital weighing scales are not expensive and are readily available.

Digital sliding gauge

One of the most important and indispensable tools for proper identification of coins is a digital sliding gauge. It is used to accurately measure the diameter of a coin in your collection. After placing the coin in-between the pair of jaws of the gauge we are able to get the precise reading with the accuracy to a 0.01 mm on the digital display of a gauge. As all coins minted have specific diameters this instrument greatly helps us in identifying fake coins.

Magnifier

A magnifier enables us to examine coin features in a fast and convenient way. By using a magnifier we are able to inspect coins surface for imperfections, irregularities and damages in such a detail that we wouldn’t be able to do so with the naked eye. It is essential tool in evaluating the grade of coins, in determining coin varieties as well as identification of counterfeit coins. It is highly recommendable that magnifier should be of a good quality and have magnification power of (10x). A handheld magnifier called loupe usually folds inside its own case and is very convenient to carry around due to its small size.

Coin albums

Coin album offers convenient way to present and store a collection. Furthermore, it allows you to organize, view and protect your coin collection.

In order to properly store and prevent your coins from being damaged or lost, it is necessary to have a suitable coin album.

High humidity, extreme temperatures, oils and acids present on the fingers, air quality (pollution), accidental scratching etc. can affect the surface of coin, reducing its value significantly. Coin album provides relatively good protection against harmful elements that are main cause for deterioration of the coins.

Most common coin albums are in the form of binder with plastic pages that have many sleeves or pockets for inserting coins. This allows for fast, easy and safe way to store and display your collection. When viewing your collection you are able to see both sides of coins by just flipping the page of the album and the coins can be easily removed from the pages and rearranged without much hassle. The ability to add pages and to create a space for different year/mintmark/variety coins allows for easy organization i.e. customization and expansion of coin collection.

For collectors who wish to form more attractive or specialized collection there are various forms of albums available on the market. The type of suitable album depends mainly on area of interest and profoundness of collector’s pursuit.

Coin folders

In the case a collector wishes to assemble a particular set of coins, coin folders would be suitable form of storage and display. Coin folders are folding sheets of cardboard that contain circular slots to hold coins, made especially for certain coin series. To place the coin inside the coin folder you simply need to “push” the coin into its slot. The main downside of coin folder is that only one side of the coin can be seen and is exposed to environment when viewed. Also, since there are no plastic slides to hold the coins in place there is a risk of coins falling out of the folder. However, specially designated slots for each variety of coin within a series substantially aid in forming a collection and provide a very presentable display of a collection.

Coin holders

Paper coin holders – “Cardboards”

The staple type paper coin holder is probably the most widely used holder in coin collecting. The square cardboard holder consists of a piece of cardboard that folds over the coin and a viewing circle cut outs covered by transparent Mylar plastic sheet glued to the inside, that displays the front and back of the coin. To use the staple type holder just insert a coin, fold over and staple. When folded over and stapled, holder enables us to view both sides of the coin while protecting it from fingerprint oils and environmental influence.

A 2×2 (aka 2-by-2, two-inch by two-inch) square cardboard holder is the most commonly used holder, although there are several different sizes of holders to store different types of coins. The other sizes include 1.5×1.5 inches for smaller coins and 2.5×2.5 inches for large coins. One of the main disadvantages of these coin holders is that they cannot be reused and that they are not airtight. However, advantages do exceed disadvantages in favor of their use, primarily because of their low cost and ability to write identifying information on the holder i.e. a notable and a very useful feature that greatly helps a collector when forming or organizing a collection.

Coin flips

Non-plasticized Mylar coin flips

The main reason for coin flips popularity among collectors and dealers is found in their design. Very simple to use, they consist of two individual pockets i.e. dual pockets that are separated but still connected. In one pocket a collector can put in a coin or medallion and in the other pocket they can put in any coin identifying information on the insert.

These holders are similar to paper coin holders “Cardboards” but are made from transparent Mylar material instead of cardboard. Coin flips also fold in half, holding a coin in one pocket and insert in other and unlike “Cardboards” they can be reused many times.

It is very important that coin flips are made from an inert Mylar that contains no PVC or other chemicals that might damage the coins. Mylar is excellent material to protect coins in the long term as it is tear and scratch resistant and as it also has a very low permeability meaning that it will not let dust or water in.

The most common size of coin flips is 2″x 2″, although there are several different sizes of coin flips to store different types of coins. The other sizes include 1.5″x 1.5″ for smaller coins and 2.5″x 2.5″ for large coins.

Major advantages in using coin flips is that coin can be removed easily, there is large area for identifying information, they are compact, safe and low cost. Moreover, they can be safely stored in the elongated cardboard storage boxes for coin flips where they can be easily labeled and organized.

Reference literature

“Buy the book before you buy the coin”

“Buy the book before you buy the coin” is one of the most popular quotes in numismatics, and for a very good reason.

As is:

“Expanding your knowledge faster than your collection can save you a few bucks.”

Coin reference guide

One of the essential items coin collector must have is reference guide in order to properly identify a coin and to be acquainted with its current price on the market. This is especially important for the novice collector, although it is indispensable tool as well to an experienced collector.

Main features of a reference catalog include descriptions of the obverse and reverse coin minted designs as well as information regarding the minting years of each of the coins and an estimation of the market value in their different states of conservation. Apart from that, it can greatly help collector to determine the origin of rare or hard to identify coins.

Although currently there are many coin reference catalogs that you can use to identify a coin, it is highly recommended by numismatists that The Standard Catalog of World Coins, Krause Publications is the best option for a worldwide collector. It provides critical coin information to aid in identification and is the most trusted reference to all world coins made from 1601 through today. The catalogue is organized in different editions by centuries, i.e. The Standard Catalog of World Coins, 1601-1700, 1701-1800, 1801-1900, 1901-2000 and is the most compelling and complete catalogue of world coins from the start of 17th century and onward.

Collectors of ancient coins face a more daunting task in terms of finding comprehensive reference guide. Enormous number of different types of ancient coins with numerous “issuing authorities” i.e. empires, rulers etc. presents difficulty in finding appropriate reference guide that would represent centuries of accumulated knowledge and research, all in one. In general, as ancient coins are categorized as Roman, Greek, Celtic, Byzantine etc. such are the formed reference guides. This inevitably leads to and requires a collector to specialize in certain area of interest.

The first choice of reference guide for ancient coins would be Ancient Coin Collecting by Wayne Sayles. Divided in six parts, Ancient Coin Collecting comprises of II: Numismatic Art of the Greek World, III: The Roman World-Politics and Propaganda, IV: Roman Provincial Coins and Ancient Coin Collecting, V: The Romaion/Byzantine Culture and VI: Non-Classical Cultures. It encompasses major empire issues and provides a great insight into ancient world numismatics. Moreover, it provides basis for a collector to see and decide which area of numismatics to further pursue and specialize in.

For collectors of early and modern American coins, the choice of reference guide is very simple. A Guide Book of United States Coins also known as “The Red Book” is perhaps the most comprehensive and reliable coin collector guide for United States coins. It provides us with listings and photos of every issue, design, variety and major error of American coins from colonials to date.

In addition, let me once again emphasize on the importance of coin grading as a crucial element in coin collecting. In order to improve your knowledge of coin grading and gain keen insights into the highly competitive business of coin grading it is imperative to have very good literature on the subject.

Highly recommended Official ANA Grading Standards for United States Coins by Kenneth Bressett offers a general introduction to grading, followed by photographs and descriptions of grades for each type of U.S. coin.

Also, the exceptional reference guide MAKING THE GRADE: Comprehensive Grading Guide for U.S. Coins by Beth Deisher and William T Gibbs provides invaluable information on the matter of coin grading making it extremely useful item for a serious collector.