The Value of Ancient Coins

It is believed that the market exchange value of a coin has strong connections with either its historic value or the value of the metal the coin is made of.

Generally coins are made of silver, gold and platinum. The modern coins of today are made of a base metal whose values rely on the status as fiat money. The status of fiat money basically means that Government is the one to determine and establish the value of a coin through its laws.

It is interesting to note that coins are minted with fiat values lower than the values of their component metal. This, however, is not performed intentionally. For instance, this phenomenon can be observed when it comes to US penny and US nickel. The significant difference between fiat and metal value of a coin would cause its removal from the market by illicit smelters who are might be interested in the value of the coin's metal content.

This is the reason why the United States Mint has implemented certain rules related to this practice, having the purpose of revealing the exports of pennies and nickels. This matter was a subject for public discussions for at least 30 days. The final decision stated that violators will be punished with a fine of up to $10.000. Moreover, they could be imprisoned for a maximum of five years.

Debasement of Coins

It was estimated that throughout history states and their governments have created more coinage than their supply of precious metals would permit. This is the reason why they resorted to coin debasement. The latter refers to a fraction of the coin's precious metal content, which is replaced by a base metal. Usually the main base metals used in this practice are copper and nickel. Thus the value of each individual coin is minimized at maximum and state's coining authority has the possibility to produce more coins.

The majority of countries decided to redenominate their currency. For instance, Turkey has redenominated its currency on January 1, 2005. As a result of this procedure, one new Turkish Lira is worth one million of the old Turkish Lira.

When it comes to United States, it has slightly modified its coinage system to accommodate the inflation. Only the one-cent coin has faced some modifications since 1864 and it still circulates despite a greatly reduced purchasing power. The largest coin in common circulation is 25 cents. Actually it has a low value for the largest denomination coin compared to other countries.

The Features of Modern coinage

There is a great deal of coins with milled edges. Usually these reeded edges were found on various coins made of silver and gold. Such coins were originally designed to show that none of the precious metal had been shaved off the coin.

Actually circulating coins suffered from the so-called "shaving" prior to the coins' milled edges usage. There were those who attempted to shave small amounts of valuable metal from the edge. For instance, the British sterling silver coins were once shaved to almost half of their weight. Such "debasement" led to the formulation of a famous law, the roots of which come from the Tudor England period. It is about Gresham's Law that took place in the monarch's periodical recall of circulating coins, paying only bullion value of the silver.

When it comes to the side of the coin that carries a bust of an authority or a national emblem, it is traditionally called the obverse. Most call this side "heads". The other side is the reverse.

It is worthy to mention that the coin's side that carries the year of its minting is the obverse. However, it is interesting to note that all Japanese, most Canadian and some Chinese coins represent an exception.

Various countries deal with different ways of orientation of coin's obverse with respect to its reverse. For example many coins have medallic orientation, these include British coins.

Coins that are not round-shaped usually feature an odd number of sides with the edges rounded off. Such coins as British 50 pence have a constant diameter and are easily recognized by different vending machines.

There are coins that come in different odd forms, such as guitar-shaped coins. They were once issued in Somalia. Poland issued a fan-shaped 10 zloty coin. But the oddest coin ever seen was considered to be the 2002 $10 coin from Nauru. This outrageous shape reminded everybody of Europe.