Collecting Coins

Coin currency

Whether they’re pennies, half dollars or dollars, coins have an intrinsic value that reflects their size and metal composition. Coins can be sold or exchanged for other currencies, such as gold or silver. They’re also used as money for everyday purchases, and can be saved and collected for their own sake or as an investment.

The history of coinage is long and complex. Before true metal coins developed in the 6th century BCE, traders used a variety of nonmonetary or semi-monetary mediums as currency. The earliest electrum coins, for example, had an intrinsic value based on their gold and silver content. But it took centuries before metal coins became the dominant means of exchange.

Coins were the first medium of exchange to achieve widespread acceptance because they are durable, divisible and portable. They are an incredibly efficient medium of exchange, and their development allowed trade to develop to a global scale.

While some people collect old coins, the majority of coins are put to use in circulation as part of our modern financial system. The Federal Reserve has announced a strategy to allocate coin inventories to ensure that banks and other depositories receive the coins they need for daily operations. The strategy includes capping coin orders, limiting supply and encouraging the public to spend spare change.

Most American coins are made of copper-plated zinc, and feature Abraham Lincoln on one side and the Lincoln Memorial on the other. A penny is worth one cent, and a dime is worth five cents. Half dollar coins feature Thomas Jefferson on the front and Monticello, his colonial plantation, on the back. Dollar coins are minted from silver, and may be worth more than their face value when found with rare error or die variety characteristics.

Besides having an inherent value, many coins can also be quite interesting to look at. A coin’s condition determines its value, and a well-worn, circulated coin can be very desirable to collectors. A rare mintmark or a unique coloration on a coin can also increase its value.

When searching for rare coins, it’s important to know your numismatic terms. For instance, if a coin’s obverse (front) and reverse (back) images are the same or have a close relationship in appearance, it has medallic orientation and is typical of Euro and pound sterling coins. If, on the other hand, the obverse image is right-side up and turning the coin left or right shows that the reverse image is the same, it has directional orientation and is typical of U.S. dollars.