Coin Collecting 102: What Exactly Is A Coin?

Everyone has heard about someone finding a rare coin in pocket change, a gold doubloon on the ocean floor, or inheriting Grandpa's vast coin collection. All these items are worth more than the intrinsic value of the metal they contain. This additional value, or premium, is because they are collectible numismatic coins.

Merriam-Webster's dictionary defines numismatics as "the study or collection of coins, tokens, and paper money and sometimes related objects (such as medals)." It also defines coins as "a usually flat piece of metal issued by a governmental authority as money." Since numismatics is a vast field of study, the term numismatic coins narrowed down to studying flat pieces of metal issued by a recognized government that functions as money.

Parts of A Coin

In the study of coins, numismatists use very specific words to communicate their findings or to describe coins to other coin collectors. Here is a brief list of the most common terms used to describe a coin.

Obverse - The front of the coin

Reverse - The back of the coin

Edge - The cylindrical side or outer border of the coin. It is also known as the "third" side of the coin

Rim - A narrow raised area on the circumference of the coin's surface. It is used to protect the design of the coin during circulation.

Field - The flat area of the coin that does not contain any design elements

Legend - The principal inscription or lettering on a coin

Motto - A short sentence or phrase chosen to capture the principles or ideals of a group of people

Portrait - An engraving of a person usually depicting only the head and shoulders

Date - The year the coin was made

Relief - The design of the coin that is raised above the field

Blank - A round piece of metal that the coin will be struck on

Planchet - A blank that has been through an upsetting mill to give it a raised rim around the circumference of the coin

Coin Press - The machine used to strike the design of the coin onto the planchet.

Reeding - Engraved or serrated lines on the edge of a coin

Clad - Two or more metals or alloys sandwiched together in layers

Bullion Coin - A coin issued by a government for its bullion value and not its face value

Coin Grading - The process of describing the quality of a coin taking into account its surface preservation, quality of the strike, condition of the planchet when struck, and eye appeal

Mintmark - A letter or letters added to the design of a coin to indicate which minting facility produced it

Circulated - A coin that has entered circulation and shows obvious signs of wear

Uncirculated (a.k.a. Mint State) - A coin that has never entered circulation and has all of its original mint luster

Business Strike (a.k.a. Circulation Strike) - A coin that is specifically minted to facilitate commerce within a country

Proof Coin - A coin that is specially prepared and struck with the highest standards of quality to be sold to coin collectors

Face Value - The stated value of the coin that is determined by the issuing country

Retail Value - The price that you would have to pay to obtain a coin from a coin dealer

Wholesale Value - The money you would get from a coin dealer when selling your coins

Close-up of the rim and edge of a Jefferson nickel

United States vs. World Coins

Just about every sovereign country around the world has its own coins and paper money. The United States is no different. Many people collect United States coins that have been issued since 1792. People assemble collections of United States coins by denomination, date and mintmark, year, or with sets.

Many people in the United States also collect coins from around the world. There are as many ways to collect world coins as there are people who collect them. Some people focus on a particular country, one specific time, a theme, or a type. The price of world coins can vary from just a few two cents to thousands or even millions of dollars. No matter your coin collecting budget, world coins can be an excellent fit for your collecting journey.

Where to Get Coins

Many people start collecting coins right from circulation. For example, they may go through their pocket change and remove coins that interest them. Also, you can purchase a coin folder or album for a particular type of coin and start filling it with coins right out of your pocket.

However, some coins may be difficult to get from circulation. This is especially true with silver coins minted in the United States in 1964 and before because the value of the silver in the coin exceeds the face value. Therefore, just about all of them have been removed from circulation.

So where can you buy coins that you can't find in circulation? Many options are available to a collector embarking upon a coin collecting journey. You can purchase coins from your local coin dealer with a storefront or from a trusted dealer through the mail, but before you do make sure to check the latest prices for the specific coin you're looking for.. In addition, you can use the Greysheet Dealer Directory website to find a coin dealer near you who specializes in an area of coin collecting that interests you.

You can also search for coin shows near you where many dealers set up to sell coins to interested collectors. Using this type of venue, you can search through many dealers' inventory in just a few hours. Finally, finding a local coin club can help you enhance your collection with the coins you are searching for.

This is the second installment of our coin collecting educational series. The first article can be found here.