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This article is about monetary coins. For other meanings see: Coin (disambiguation)

Numismatics

Numismatic terminology

Currency Coins, Banknotes, Forgery Circulating currencies Community currencies Company scrip, LETS, Time dollars Fictional currencies

Ancient currencies Greek, Roman, Byzantine Medieval currencies Modern currencies Africa, The Americas, Europe, Asia, Oceania

Production Mint, Designers Coining, Milling, Hammering

Exonumia Credit cards, Medals, Tokens Notaphily Banknotes Scripophily Stocks, Bonds

A coin is usually a piece of hard material, generally metal, usually in the shape of a disc, and most often issued by a government, to be used as a form of money in transactions. Along with banknotes, coins make up the cash forms of all modern money systems. Coins made for circulation (general monetized use) are usually used for lower-valued units, and banknotes are usually used for the higher values; also, in most money systems, the highest value coin is worth less than the lowest-value note. Invariably also, the face value of circulation coins is less than the gross value of the metal used in making them.

Exceptions to these rules occur for non-monetized "bullion coins" made of silver or gold (and, rarely, other metals, such as platinum or palladium), intended for collectors or investors in precious metals. For examples of modern gold collector/investor coins, the United States mints the American Gold Eagle, Canada mints the Canadian Gold Maple Leaf, and South Africa mints the Krugerrand. The U.S. Eagle coin has a "face value" of ten U.S. dollars, and the Double Eagle has a "face value" of twenty U.S. dollars, but these are historical references to pre-depression times when this was the case; they no longer apply, since the market value of the coin, and the gold in it, has been many times that amount since the coin was re-issued as a modern collector and investor's item, in 1986. The Canadian Gold Maple Leaf also has nominal face value, but the Krugerrand does not.

Historically, a great number of coinage metals (including alloys) and other materials have been used practically, impractically (i.e., rarely), artistically, and experimentally in the production of coins for both circulation, collection, and metal investment (where bullion coins often serve as more convenient stores of assured metal quantity and purity than other bullion).

See Coin collecting and Numismatics for more information on the collecting of coins, bank notes, token coins and Exonumia.

The market exchange value of a coin comes from its historic value, and/or the intrinsic value of the component metal (for example gold coins, silver coins or platinum coins). Such money in coin or currency, backed by a free-market decided amount of metal, which are guaranteed to be present in the coin, or in exchange for the currency, has been termed commodity money.

However, in modern times, most coins are made of a base metal, and their value comes from their status as fiat money. This means that the value of the coin is decreed by government fiat (law), and thus is determined by the free market only as national currencies are subjected to arbitrage in international trade. This causes such coins to be monetary tokens in the same sense that paper currency is, when the paper currency is not backed directly by metal, but rather by a government guarantee of international exchange of goods or services. Some have suggested that such coins not be considered to be "true coins" (see below). However, because fiat money is backed by government guarantee of a certain amount of goods and services, where the value of this is in turn determined by free market currency arbitrage, similar to the case for the international arbitrage which determines the value of metals which back commodity money, in practice there is very little practical economic difference between the two types of money (types of currencies).

Occasionally, coins are minted that have fiat values lower than the value of their component metals, but this is never done intentionally and initially, and only happens by accident later in the history of coin production, as market values for the metal overtake the fiat declared face value of the coin. Examples of this phenomenon currently include the US nickel and US penny. Extreme cases of large differences between fiat values and metal values of coins would cause coins to be removed from the market by illicit smelters interested in the value of their metal content. In fact, the United States Mint, in anticipation of this practice, implemented new interim rules on December 14, 2006, subject to public comment for 30 days, which criminalize the melting and export of pennies and nickels.[1] Violators can be punished with a fine of up to $10,000 and/or imprisoned for a maximum of five years.

To distinguish between these two types of coins, as well as from other forms of tokens which have been used as money, some monetary scholars have attempted to define by three criteria that an object must meet to be a "true coin".^{[citation needed]} These criteria are:

1. It must be made of a valuable material, and trade for close to the market value of that material.
2. It must be of a standardized weight and purity.
3. It must be marked to identify the authority that guarantees the content.

One of the earliest coins, an early 6th century BC one-third stater coin from Lydia.

By the above definition, the invention and first known usage of coins comes from the Kingdom of Lydia circa 643-630 B.C. Under three generations of Lydian kings, the money of Lydia gradually moved from being lumps of electrum (a naturally occurring alloy of silver and gold) to coins of a guaranteed weight and purity, marked with the seal of the King. True coins also developed very close to this time frame in both India and China.

In 1979 and 1980, a Chinese architectural team excavating the region surrounding the ancient kingdom of Loulan discovered some Mesolithic stone tools and coins (see Loulan: Modern Chinese Expeditions).

Main article: Debasement

Throughout history, governments have been known to create more coinage than their supply of precious metals would allow. By replacing some fraction of a coin's precious metal content with a base metal (often copper or nickel), the intrinsic value of each individual coin was reduced (thereby "debasing" their money), allowing the coining authority to produce more coins than would otherwise be possible. Debasement of money almost always leads to price inflation unless price controls are also instituted by the governing authority.

The United States is unusual in that it has only slightly modified its coinage system to accommodate two centuries of inflation. The one-cent coin has changed little since 1864 (though its composition was changed in 1982 to remove virtually all copper from the coin) and still remains in circulation, despite a greatly reduced purchasing power. On the other end of the spectrum, the largest coin in common circulation is 25 cents, a low value for the largest denomination coin compared to other countries. Recent increases in the prices of copper, nickel, and zinc, mean that both the US one- and five-cent coins are now worth more for their raw metal content than their face (fiat) value. In particular, copper one-cent pieces (those dated prior to 1982 and some 1982-dated coins) now contain about two cents' worth of copper.

A bronze coin of the Chinese Han Dynasty—circa 1st century BC. Some modern Japanese coins still have the characteristic hole in the coin.

An ancient Greek coin, struck under Roman rule, circa 268 AD.

The milled, or reeded, edges still found on many coins (always those that were once made of gold or silver, even if not so now) were originally designed to show that none of the valuable metal had been shaved off the coin. Prior to the use of milled edges, circulating coins commonly suffered from "shaving", by which unscrupulous persons would shave a small amount of precious metal from the edge. Unmilled British sterling silver coins were known to be shaved to almost half of their minted weight. This form of debasement in Tudor England led to the formulation of Gresham's Law. The monarch would have to periodically recall circulating coins, paying only bullion value of the silver, and re-mint them.

Traditionally, the side of a coin carrying a bust of a monarch or other authority, or a national emblem, is called the obverse, or colloquially, heads. The other side is called the reverse, or colloquially, tails. However, the rule is violated in some cases. [2] Another rule is that the side carrying the year of minting is the obverse, although some Chinese coins, most Canadian coins, the British 20p coin, and all Japanese coins, are an exception.

British fifty pence coin

The orientation of the obverse with respect to the reverse differs between countries. Some coins have coin orientation, where the coin must be flipped vertically to see the other side; other coins, such as British coins, have medallic orientation, where the coin must be flipped horizontally to see the other side.

Coins that are not round (British 50 pence for example) usually have an odd number of sides, with the edges rounded off. This is so that the coin has a constant diameter, and will therefore be recognised by vending machines whichever way it is inserted. If a coin had an even number of sides this would not be possible. Some such older designs remain, however, such as the 12-sided Australian 50 cent coin.

Coins are popularly used as a sort of two-sided die; in order to choose between two options with a random possibility, one choice will be labeled "heads" and the other "tails," and a coin will be flipped or "tossed" to see whether the heads or tails side comes up on top. See Bernoulli trial; a fair coin is defined to have the probability of heads (in the parlance of Bernoulli trials, a "success") of exactly 0.5. A widely publicized example of an asymmetrical coin is the Belgian one euro coin [3]. See also coin flipping.

Gold sovereigns and a Krugerrand

Coins are sometimes falsified to make one side weigh more. Such a coin is said to be "weighted."

Some coins, called bracteates, are so thin they can only be struck on one side.

Bi-metallic coins are sometimes used for higher values and for commemorative purposes. In the 1990s, France used a tri-metallic coin. Common circulating examples include the €1, €2, British £2 and Canadian $2.

Guitar-shaped coins were once issued in Somalia, Poland once issued a fan-shaped 10 zloty coin, but perhaps the oddest coin ever was the 2002 $10 coin from Nauru, a Europe-shaped coin.[4]

The Royal Canadian Mint is now able to produce holographic-effect gold and silver coinage.

For a list of many pure metallic elements and their alloys which have used in actual circulation coins and for trial experiments, see coinage metals. [5]

Numismatics Portal

Wikimedia Commons has media related to:

Coins

• Bracteate
• Numismatics
• Banknote
• Bullion coin
• Coin collecting
• Coinage Metals
• Counterfeit
• Currency
• Euro coins
• Roman currency
• Greek coinage
• Category:Currency images

• Denis R. Cooper: The art and craft of coinmaking. A history of Mining Technology. London: Spink, 1988. ISBN 0-907605-27-3.

• Atlantic Provinces Numismatic Association providing news, events, latest releases from around the world, forums, and much more.
• CoinFacts.com - The Internet Encyclopedia of US Coins Free information on United States Coins, including pricing, rarity, and historical information.
• Numismopolis-Ancient Coin collecting, Ancient Minting, and Experimental archaeology. - includes information about collecting and ancient minting
• Ancient Greek Coins: Free Coin Organizer
• Coin Talk Forum - Community website for numismatists and coin collectors
• Coins - Introduction to coin collecting
• Challenge Coin Association
• Coin Image Database
• Counterfeit silver coins and how to detect them.
• Coincat - An online coin catalog

History of Coins

• World's First Coin: The Lydian Lion