The History of Coin Currency
Coins are metal pieces bearing a design that represent a particular denomination of money. They may be made of a precious metal, an alloy, or some other material. They are minted to provide an alternative medium of exchange to paper currency. They are generally used for small values, although large coins can be found in circulation as well. Coins have been used in many cultures throughout history as a means of trading goods and services. They are an essential component of any modern economy, despite the increasing popularity of cryptocurrencies like Bitcoin.
Coin currency first proliferated nearly three thousand years ago among the Lydians in what is now Turkey. They were more durable than the cowrie shells of Africa or the fei stones of Micronesia, and they were easier to transport than barter items such as silk, salt, or cocoa seeds. They were also easier to use than the ingots of precious metal and more reliable than the bills of exchange of medieval Europe or the gold dinars of the Ottoman empire.
Copper, nickel, and silver have provided the core of most coinages throughout history. Zinc, aluminum, and some other alloys have supplemented them in times of economic stress or shortages. Lead, which degrades quickly, has rarely been used in coins. Precious metals were the main currency in ancient Greece, although a few bronze and brass coins circulated. Paper money began to appear in medieval Europe and in the early modern period, but coins continued to dominate the world’s economies for a few centuries longer.
A coin’s obverse has its face, which shows the portrait of the reigning monarch, president, or other head of state and the year the coin was minted. A coin’s reverse has its legal tender value, the amount that a government agrees to pay in exchange for a good or service. It is typically surrounded by the coin’s edge, which includes a raised bump called the “rim”. Some coins also have a blank space on their reverse known as an exergue. It may be left blank or contain a privy mark, mint mark, or other decorative or informative design feature.
The circulating coinage of a nation is usually comprised of a series of denominations, each one bearing the name and image of its king or other head of state. In addition, some countries use commemorative coins and bullion coins. In the United States, the denominations range from one cent to $100, with the majority of denominations in the $5 and $10 range.
Most people don’t think much about how coins get to their wallets, dressers, and change sorters. But Federal Reserve banks and commercial banks think about it all the time, as they’re responsible for getting those coins out into the economy. This past year, during the COVID-19 pandemic, they had to do even more to get American pennies, nickels, and dimes into the hands of consumers. Without those coins, customers and businesses have to rely on credit and debit cards. That adds to the cost of doing business, especially when those pennies impose what economists call a “time tax” on every transaction.