Coin
A selection of modern coins.
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A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory.

Coins are usually metal or a metallic material and sometimes made of synthetic materials, usually in the shape of a disc, and most often issued by a government. Coins are used as a form of money in transactions of various kinds, from the everyday circulation coins to the storage of large numbers of bullion coins. In the present day, coins and banknotes make up currency, the cash forms of all modern money systems. Coins made for paying bills and general monetized use are usually used for lower-valued units, and banknotes for the higher values; also, in many money systems, the highest value coin made for circulation is worth less than the lowest-value note. In the last hundred years, the face value of circulation coins has usually been higher than the gross value of the metal used in making them; exceptions occurring when inflation causes the metal value to surpass the face value, causing the minting authority to change the composition and the old coins to begin to disappear from circulation (see Gresham's Law.) However, this has generally not been the case throughout the rest of history for circulation coins made of precious metals.

Exceptions to the rule of coin face-value being higher than content value, also occur for some bullion coins made of silver or gold (and, rarely, other metals, such as platinum or palladium), intended for collectors or investors in precious metals. Examples of modern gold collector/investor coins include the American Gold Eagle minted by the United States, the Canadian Gold Maple Leaf minted by Canada, and the Krugerrand, minted by South Africa. The American Gold Eagle has a face value of US$50, and the Canadian Gold Maple Leaf coins also have nominal (purely symbolic) face values (e.g., C$50 for 1 oz.); but the Krugerrand does not.

Historically, a great number of coinage metals (including alloys) and other materials have been used practically, artistically, and experimentally in the production of coins for circulation, collection, and metal investment, where bullion coins often serve as more convenient stores of assured metal quantity and purity than other bullion.[1]

Coins have long been linked to the concept of money, as reflected by the fact that in some other languages the words "coin" and "currency" are synonymous. Fictional currencies may also bear the name coin (as such, an item may be said to be worth 123 coin or 123 coins).

Contents

The value of a coin

In terms of its value as a collector's item, a coin is generally made more or less valuable by its condition, specific historical significance, rarity, quality/beauty of the design and general popularity with collectors. If a coin is greatly lacking in all of these, it is unlikely to be worth much. Bullion coins are also valued based on these factors, but are largely valued based on the value of the gold or silver in them. Sometimes non-monetized bullion coins such as the Canadian Maple Leaf and the American Gold Eagle are minted with nominal face values less than the value of the metal in them, but as such coins are never intended for circulation, these value numbers are not market but fiat values.

Most coins presently 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 inasmuch as national currencies are subjected to various types of foreign exchange markets 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 exchange rates, similar to the case for the international market exchange values which determines the value of metals which back commodity money, in practice there is very little economic difference between the two types of money (types of currencies).

Coins may be minted that have fiat values lower than the value of their component metals, but this is never done intentionally and initially for circulation coins, and happens only in due course later in the history of coin production due to inflation, as market values for the metal overtake the fiat declared face value of the coin. Examples of this phenomenon include the pre-1965 US dime, quarter, half dollar, and dollar, US nickel, and pre-1982 US penny. As a result of the increase in the value of copper, the United States greatly reduced the amount of copper in each penny. Since mid-1982, United States pennies are made of 97.5% zinc, coated with 2.5% copper. Extreme differences between fiat values and metal values of coins causes coins to be removed from circulation by illicit smelters interested in the value of their metal content. This is an example of Gresham's Law. 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 criminalized the melting and export of pennies and nickels.[2] Violators can be punished with a fine of up to $10,000 and/or imprisoned for a maximum of five years.

First coins

Homer used the ox as the base "currency" of goods, for example he valued the bronze armour of Diomedes worth nine oxen, while the golden armour of Glaucus, worth one hundred oxen.[3] As a measure of gold he used the talent, Achilles for example gives half-talent of gold to Antilochus as a prize .[4]

Herodotus states (I, 94) that the Lydians 'were the first to coin in gold and silver'. Aristotle states that the first coins were struck by Demodike of Kyme, of Ancient Greece, who had married Midas, king of Pessinus, and had by him a son named Agamemnon [5]

Greek drachma of Aegina. Obverse: Land Chelone / Reverse: ΑΙΓ(INA) and dolphin. The oldest Aegina Chelone coins depicted sea turtles and were minted ca. 700-550 BC.

Some archaeological and literary evidences suggest that the Indians invented coinage, somewhere between the 6th to 5th century BC.[6] However, some numismatists consider coins to have originated ca. 600-550 BC in Anatolia, which corresponds to modern-day Turkey, in particular in the Anatolian kingdom of Lydia.[7][8] Opponents of the Lydia scenario point to the fact that coins of that era have been totally absent from archeological finds in Sardis, capital of Lydia.[9] A coin, by definition, is an object used to facilitate commerce and exchanges. The proponents of the Lydian Greek coins scenario admit the fact that they were likely not used in commerce or industry. Electrum coins were not standardized in weight and are considered by opponents as badges, medals or ceremonial objects issued by priests,[10] rather than coins (actually the oldest of them have been discovered not in Lydia, but in an ancient Greek temple of Ephesos, a city colony built by the ancient Greeks in what is now Turkey).

The oldest coins are considered by other numismatists to be the Aegina Chelone coins which were minted ca. 700-550 BC, either by the local Aegina people or by Pheidon king of Argos (who first set the standards of weights and measures). In the Bibliothèque Nationale, Paris, there is a unique electrum stater of Aegina. The date of this coin can hardly be much later than about B.C. 700.[11]

The Ancient Greeks spread the Anatolia practice (or vice versa) and extended it to commerce and trade. Coinage followed Greek colonization and influence first around the Mediterranean and soon after to North Africa (including Egypt), Syria, Persia, and the Balkans.

The first Lydian coins were made of electrum, a naturally occurring alloy of silver and gold that was further alloyed with added silver and copper.[12] Many early Lydian and Greek coins were undoubtedly minted under the authority of private individuals and are thus more akin to tokens or badges than true coins, though because of their numbers it's evident that some were official state issues, with King Alyattes of Lydia being a frequently mentioned originator of coinage.[13]

Most of the early Lydian coins include no writing, called a "legend" or "inscription", only an image of a symbolic animal. Therefore the dating of these coins relies primarily on archeological evidence, with the most commonly cited evidence coming from excavations at the Temple of Artemis at Ephesus, also called the Ephesian Artemision (which would later evolve into one of the Seven Wonders of the Ancient World). The fact that the oldest lion head coins were discovered in that temple, and the fact that they were not used in commerce, strengths the scenario that these coins found there may have actually been badges or medals that were issued by the priests of the temple of Artemis, and the name of the person who received the badge or medal was inscribed on it. Artemis in Anatolia was named Potnia Theron, which is translated as "mistress of the animals", and her symbol was the lion and the tiger.

A small percentage of early Lydian Greek coins have a legend.[14]

Set of three roman aurei depicting the rulers of the Flavian dynasty. Top to bottom: Vespasian, Titus and Domitian. 69-96 AD.

A famous early electrum coin, the most ancient inscribed coin at present known, is from nearby Caria, Asia Minor. This coin has a Greek legend reading "Phaenos emi sema" [15] which can be translated either as "I am the badge of Phanes" or as "I am the sign of light" [16] or maybe "I am the tomb of light" or "I am the tomb of Phanes". The celebrated coins of Phanes are known to be amongst the earliest of Greek coins, a hemihekte of the issue was found in the famous foundation deposit of the temple of Artemis at Ephesos (this deposit is considered the oldest deposit of electrum coins discovered). One assumption is that Phanes was a wealthy merchant, another that this coin is associated with Apollo-Phanes and, due to the Deer, with Artemis (twin sister of the god of light Apollo-Phaneos). Although only seven Phanes type coins were discovered, it is also notable that 20% of all early electrum coins also have the Lion (symbol of Artemis-Potnia Theron) and the sun burst (symbol of Apollo-Phaneos). Alternatively it is stated [17] that the inscribed Phanes maybe was the Halicarnassian mercenary of Amasis, mentioned by Herodotus,[18] who escaped to the court of Cambyses, and became his guide in the invasion of Egypt in the year B.C. 527 or 525. According to Herodotus, this Phanes was buried alive by a sandstorm, together with 50000 Persian soldiers, while trying to conquer the temple of AmunZeus in Egypt.[19] The fact that the Greek word "Phanes" also means light (or lamp), and the word "sema" also means tomb,[20] makes this coin a famous and controversial one.[21]

Another possible candidate for first metal coins come from China. The earliest known Chinese metal tokens were made ca. 900 BC, discovered in a tomb near Anyang.[22][23] These were replicas in bronze of earlier Chinese money, cowry shells, so they were named Bronze Shell.[24][25][26]

Most numismatists, however, regard these as well as later Chinese bronzes that were replicas of knives, spades, and hoes as money but not as coins because they did not at least initially carry a mark or marks certifying them to be of a definite exchange value.[27]

Along with Anatolia and China, India also played a major part in the development of coinage. The first Indian coins were minted around the 6th century BC by the Mahajanapadas of the Indo-Gangetic Plain. The coins of this period were punch marked coins called Puranas, Karshapanas or Pana.[28] The Mahajanapadas that minted their own coins included Gandhara,[29] Kuntala,[30] Kuru,[31] Panchala,[32] Shakya,[33] Surasena,[34] and Surashtra.[35]

The earliest coins made of pure gold and silver were made by King Croesus of Lydia, son of Alyattes. Shortly afterward in the same region gold "darics" and silver "sigloi" were issued by the Achaemenid Empire of the Persians.

The first European coins are regarded as having been minted ca. 550 BC in Aegina, an island in the Aegean Sea, with coins of Athens and Corinth soon following.[36] The first Roman coins, which were crude, heavy cast bronzes, were issued ca. 289 BC.[37] The first European coin to use Arabic numerals to date the year in which the coin was minted was the Swiss 1424 St. Gallen silver Plappart.[38]

Coin 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 sometimes occurs in order to make the coin harder and therefore less likely to be worn down as quickly. Debasement of money almost always leads to price inflation unless price controls are also instituted by the governing authority, in which case a black market will often arise.

The United States is unusual in that it has only slightly modified its coinage system (except for the images and symbols on the coins, which have changed a number of times) to accommodate two centuries of inflation. The one-cent coin has changed little since 1856 (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. Some denominations of circulating coins that were formerly minted in the United States are no longer made. These include coins with a face value of half a cent, two cents, three cents,and twenty cents. (The Half Dollar and Dollar coins are still produced, but mostly for vending machines and collectors.) The United States also used to coin the following denominations for circulation in gold: One dollar, $2.50, three dollars, five dollars, ten dollars, and twenty dollars. In addition, cents were originally slightly larger than the modern quarter and weighed nearly half an ounce, while five cent coins were smaller than a dime and made of a silver alloy. Dollars were also much larger and weighed approximately an ounce. One dollar coins are no longer produced and rarely used. The U.S. also has bullion and commemorative coins with the following denominations: 50¢, $1, $5, $10, $25, $50, and $100.

Other uses

Some convicted criminals from the British Isles who were sentenced to transportation to Australia in the 18th and 19th centuries used coins to leave messages of remembrance to loved ones left behind in Britain. The coins were defaced, smoothed and inscribed, either by stippling or engraving, with sometimes touching words of loss. These coins were called "convict love tokens" or "leaden hearts".[39] A number of these tokens are in the collection of the National Museum of Australia.

Features of modern coins

1884 United States Trade Dollar.

Circulating coins commonly suffered from "shaving" or "clipping", by which persons would cut off small amounts of precious metal from their edges to form new coins.[40] Unmilled British sterling silver coins were sometimes reduced to almost half their minted weight. This form of debasement in Tudor England was commented on by Sir Thomas Gresham, whose name was later attached to Gresham's Law. The monarch would have to periodically recall circulating coins, paying only bullion value of the silver, and reminting them. This, also known as recoinage, is a long and difficult process that was done only occasionally.[41] While master of the Royal Mint, Isaac Newton came up with the idea of milling lines on the edges of coins to make it easier to detect coin clipping and to help reduce recoining.[42] The milled, or reeded, edges are still found on many coins today.

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; see also List of people on coins. The other side is called the reverse, or colloquially, tails. However, the rule is violated in some cases.[43] Another rule is that the side carrying the year of minting is the obverse, although some Chinese coins, most Canadian coins, the pre-2008 British 20p coin, and all Japanese coins, are exceptions.

In cases where a correctly oriented coin is flipped vertically to show the other side correctly oriented, the coin is said to have coin orientation. In cases where a coin is flipped horizontally to show the other side, it is said to have medallic orientation. While coins of the United States Dollar are coin orientated, those of the Euro and British Pound are medallic.

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.

The exergue is the space on a coin beneath the main design, often used to show the coin's date, although it is sometimes left blank or containing a mint mark, privy mark, or some other decorative or informative design feature. Many coins do not have an exergue at all, especially those with few or no legends, such as the Victorian bun penny.

Not all coins are round. The Australian 50 cent coin, for example, has twelve flat sides. A twist on it is wavy edges, found in the two dollar and the twenty cent coins of Hong Kong and the 10 cent coins of Bahamas. Some coins have also been issued in the shape of a square, such as the 15 cent coin of the Bahamas. During the 1970s, Swazi coins were minted in several shapes, including squares, polygons, and wavy edged circles with 8 and 12 waves.

Some other coins, like the British Fifty pence coin and the Canadian Loonie, have an odd number of sides, with the edges rounded off. This way the coin has a constant diameter, recognisable by vending machines whichever direction it is inserted.

A triangular coin with a face value of five pounds (produced to commemorate the 2007/2008 Tutankhamun exhibition at The O2 Arena) was commissioned by the Isle of Man, it became legal tender on 6 December 2007.[44]. Other triangular coins issued earlier include: Cabinda coin, Bermuda coin, 2 Dollar Cook Islands 1992 triangular coin, Uganda Millennium Coin and Polish Sterling-Silver 10-Zloty Coin.[45]

3 Russian Rubles coin minted in 2008.

Guitar-shaped coins were once issued in Somalia. Poland once issued a fan-shaped 10 złoty coin and the 2002 $10 coin from Nauru, was Europe-shaped.[46]

Some mediaeval coins, called bracteates, were so thin they were struck on only one side.

The Royal Canadian Mint is now able to produce holographic-effect gold and silver coinage. However this procedure is not limited to only bullion or commemorative coinage. The 500 yen coin from Japan, was subject to a massive amount of counterfeiting. The Japanese government in response produced a circulatory coin with a holographic image.

The Canadian Mint has also released several coins that are coloured, the first of which was in commemoration of remembrance day. The subject was a coloured poppy on the reverse of a 25 cent piece.

For a list of many pure metallic elements and their alloys which have been used in actual circulation coins and for trial experiments, see coinage metals.[47]

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. See also coin flipping. Coins are sometimes falsified to make one side weigh more, in order to simulate a fair type of coin which is actually not fair. Such a coin is said to be "weighted".

See also

References and sources

References
  1. ^ Comprehensive list of metals and their alloys which have been used at various times, in coins for all types of purposes.
  2. ^ The United States Mint Pressroom
  3. ^ Homer, Iliad Hom. Il. 6.232
  4. ^ Homer, Iliad, Hom. Il. 23.784.
  5. ^ http://www.metrum.org/gyges/homgyg.htm
  6. ^ Indian Encyclopaedia. Biographical, Historical, Religious, Administrative, Ethnological, Commercial And Scientific edited by Subodh Kapoor
  7. ^ M. Kroll, review of G. Le Rider's La naissance de la monnaie, Schweizerische Numismatische Rundschau 80 (2001), p. 526.
  8. ^ D. Sear, Greek Coins and Their Values Vol. 2, Seaby, London, 1979, p. 317.
  9. ^ G. Hanfmann, pp. 73, 77. R. Seaford, p. 128, points out, "The nearly total lack of ... coins in the excavated commercial-industrial areas of Sardis suggests that they were concentrated in the hands of the king and possibly wealthy merchants."
  10. ^ "THE TYPES OF GREEK COINS" AN ARCHAEOLOGICAL ESSAY BY PERCY GARDNER 1883 p.42 "Considering these and other facts it may be held to be probable, if not absolutely proved, that priests first issued stamped coin, and that the first mints were in Greek temples." [1]
  11. ^ http://www.snible.org/coins/hn/aegina.html
  12. ^ http://rg.ancients.info/lion/article.html Accessed December 2009
  13. ^ A. Ramage, "Golden Sardis", King Croesus' Gold: Excavations at Sardis and the History of Gold Refining, edited by A. Ramage and P. Craddock, Harvard University Press, Cambridge, 2000, p. 18.
  14. ^ http://www.snible.org/coins/hn/inscriptions.html
  15. ^ http://www.britishmuseum.org/explore/highlights/highlight_objects/cm/e/electrum_stater_inscribed_with.aspx
  16. ^ Newton (Num. Chron., 1870, p. 238
  17. ^ http://www.archive.org/stream/newnumismatic18royauoft/newnumismatic18royauoft_djvu.txt
  18. ^ Herodotus third book (ch. iv.)
  19. ^ Herodotus third book
  20. ^ Iliad 2.814, 6.419
  21. ^ http://www.snible.org/coins/hn/ionia.html#571
  22. ^ http://www.big5.henan.gov.cn/hngk/system/2006/08/02/010000219.shtml (IN CHINESE ONLY)
  23. ^ http://books.google.com/books?id=RGu62yiVF8wC&pg=PT186&dq=shang+coin&lr=#PPT187,M1
  24. ^ http://chinesechinese.net/HistoryofChina.html A snap shot view of The history of China by YK Kwan
  25. ^ http://www.travelchinaguide.com/intro/focus/currency.htm Shell Money before Qin Dynasty
  26. ^ http://encarta.msn.com/encyclopedia_681500371_2/shang_dynasty.html Shang Dynasty Economy Encarta. Archived 2009-10-31.
  27. ^ G. Davies, A History of Money: From Ancient Times to the Present Day, University of Wales Press, Cardiff, 1994, pp. 54-57, 62.
  28. ^ See P.L. Gupta: Coins, New Delhi, National Book Trust, 1996, Chapter II.
  29. ^ http://coinindia.com/galleries-gandhara.html Accessed 2007-06-03
  30. ^ http://coinindia.com/galleries-kuntala.html Accessed 2007-06-03
  31. ^ http://coinindia.com/galleries-kuru.html Accessed 2007-06-03
  32. ^ http://coinindia.com/galleries-panchala.html Accessed 2007-06-03
  33. ^ http://coinindia.com/galleries-shakya.html, Accessed 2007-06-03
  34. ^ http://coinindia.com/galleries-shurasena.html Accessed 2007-06-03.
  35. ^ http://coinindia.com/galleries-surashtra.html Accessed 2007-06-03
  36. ^ C. Kraay, Archaic and Classical Greek Coins, University of California Press, Berkeley, 1976.
  37. ^ W. Sayles, Ancient Coin Collecting III: The Roman World–Politics and Propaganda, Krause Publications, Iola, Wisconsin, 1997
  38. ^ Early Dated Coins, http://www.medievalcoinage.com/earlydated, Accessed December 2009.
  39. ^ Convict tokens, National Museum of Australia
  40. ^ Cooper, George (2008). The Origin of Financial Crises. New York: Random House. p. 46. ISBN 978-0-307-47345-5. 
  41. ^ Cooper G. 2008 p.47
  42. ^ Cooper G. 2008 p.46
  43. ^ The Euro Coin and the Inadequacy of our definition of "Obverse"
  44. ^ It is unlikely to be spent as it costs 15GBP to buy - article Pyramid coin a nightmare for pockets, article by Gary
  45. ^ Triangular Coins
  46. ^ Unusual coins 10/15/09
  47. ^ Metals Used in Coins and Medals
Sources

Further reading

  • Angus, Ian. Coins & Money Tokens. London: Ward Lock, 1973. ISBN 0706318110

External links


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  • coin — coin …   Dictionnaire des rimes

  • coin — [ kwɛ̃ ] n. m. • XIIe; lat. cuneus 1 ♦ Instrument de forme prismatique (en bois, en métal) utilisé pour fendre des matériaux, serrer et assujettir certaines choses. ⇒ 2. cale, patarasse. Assujettir avec des coins (⇒ coinçage, coincement) . Ôter… …   Encyclopédie Universelle

  • Coin — ist der Name mehrerer Orte in den Vereinigten Staaten: Coin (Arkansas) Coin (Iowa) Coin (Kentucky) Coin (Minnesota) Coin (Nevada) in Frankreich: Coin lès Cuvry, Ort in Frankreich Coin sur Seille, Ort in Frankreich in Spanien: Coín, einer Gemeinde …   Deutsch Wikipedia

  • Coín — es un pueblo de la provincia de Málaga (España), de unos 20.000 habitantes, tuvo resonancia en los medios por el asesinato de Sonia Carabantes en 2003. COÍN PUEBLO DE LA PROVINCIA DE MÁLAGA Coín es un pueblo de provincia de Málaga, fué fundado… …   Enciclopedia Universal

  • Coin — (koin), n. [F. coin, formerly also coing, wedge, stamp, corner, fr. L. cuneus wedge; prob. akin to E. cone, hone. See {Hone}, n., and cf. {Coigne}, {Quoin}, {Cuneiform}.] 1. A quoin; a corner or external angle; a wedge. See {Coigne}, and {Quoin} …   The Collaborative International Dictionary of English

  • Coin — Coin, v. t. [imp. & p. p. {Coined} (koind); p. pr. & vb. n. {Coining}.] 1. To make of a definite fineness, and convert into coins, as a mass of metal; to mint; to manufacture; as, to coin silver dollars; to coin a medal. [1913 Webster] 2. To make …   The Collaborative International Dictionary of English

  • coin — coin·age; coin; coin·er; coin·tise; Coin·treau; re·coin; …   English syllables

  • coin — [koin] n. [ME < OFr coin, coigne, a wedge, stamp, corner < L cuneus, a wedge < IE base * kū , pointed > OIr cuil, L culex, gnat, Avestan sū kā, needle] 1. archaic var. of QUOIN 2. a) a usually round piece of metal with a distinctive… …   English World dictionary

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  • Coin — Coin, v. i. To manufacture counterfeit money. [1913 Webster] They cannot touch me for coining. Shak. [1913 Webster] …   The Collaborative International Dictionary of English

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