Coins and Cryptocurrency
A coin is a small, flat metal object used as money and legal tender. It is typically round in shape and standardized in weight, and it can contain a design that represents the nation or other entity that mints it or bears its name. It is often stamped with the denomination of the coin (for example, “quarter”) and may also include a date or other information relevant to its production. Coins are generally made of a precious metal and circulate among businesses, consumers and investors for exchange.
Cryptocurrency is a medium of exchange based on an algorithm and a blockchain that functions as a distributed ledger. While there are many different cryptocurrencies, the most popular are Bitcoin, Ethereum and Ripple. Cryptocurrencies are decentralized and censorship-resistant, making them attractive to people who want to avoid the influence of government and corporate interests in their financial transactions. Some governments have banned or restricted the use of cryptocurrency, while others endorse and regulate it.
Before coins became the monetary standard, other mediums of exchange played a role in society. These might have included miniature hoes and billhooks with inscriptions that indicated authority, or bronze rings that were commonly found in medieval Europe. Coinage proper developed slowly from these and other nonmonetary currencies, as did decimalization.
The value of a coin as a collectible depends on several factors, including its condition, specific historical significance, rarity, quality, beauty of the design and popularity with collectors. Its price in the marketplace, on the other hand, is determined by the market and its relationship to a country’s economy. Bullion coins such as the American Gold Eagle and Canadian Maple Leaf are minted with nominal face values that are less than the amount of silver or gold they contain, but these face values have no bearing on their true worth.
A coin’s worth as a means of payment primarily depends on its intrinsic value, which is determined by its metal content and the extent to which it has been minted and worn. Most coins are round, but some have other shapes, such as squares and polygons. The Australian 50-cent coin, for example, has twelve flat sides, while the British £2 and 20-cent coins have wavy edges.
Before a coin is released for circulation, it must be approved by the Federal Reserve Board of Governors and printed by the Bureau of Engraving and Printing. It is then shipped to the Federal Reserve Banks, which distribute it to banks and other financial institutions. In addition to pennies and dimes, the United States Mint issues other circulating coins such as the half dollar, three-cent piece, five-cent coin and one-dollar coin. Some of these coins, such as the Eisenhower dollars, are no longer in circulation because they were minted only until December 1978 and distributed to banks in April 1979.