Numismatics is the study of the collection of mediums of currency, such as tokens, banknotes, coins, medals, and others.
The discipline also examines what people commonly used to trade before money existed. Pre-currency forms of payment go by the unusual name “Odd and Curious.” Popular examples include bracelets, crosses, furs, and more.
This article explores the concept of numismatics, the historical significance of coins, and the art of coin collection.
History of Numismatics
The inception of numismatics as a discipline mainly ties back to royalty and the 19th century. At that time, coin collection was just a popular hobby among the richest. That is why it is often referred to as “the hobby of the kings.”
Before that, Caesar Augustus had the practice of giving gifts of exotic coins that were uncommon in Rome to his guests.
Collecting coins was also a hobby of Renaissance-era royalty. Europeans were interested in the materials and collections of prior civilizations, especially the coins with images of mythical gods and goddesses, animals, and rulers.
Numismatics became popular over time, leading to the formation of coin-collecting organizations in the 1800s, like the New York-based American Numismatics Society, for example.
The collection of coins has also gained traction following the advancement of the internet due to easier access to information and numismatic communities.
Numismatics and the Study of Coins
Numismatists are attracted to coins due to their uniqueness and authenticity. The oldest ones contain irregularities, giving them an extra level of appeal.
Furthermore, they are mostly “commodity currency.” This means that they are made with real precious metals.
These two factors, alongside the unique story of the civilization they came from, explain why old coins garner such interest.
Coins can also be of great assistance to archaeologists at a digging site. If a coin is unearthed, it offers a precise chronological context for the particular layer of the dig.
This adds legitimacy to the excavation findings, while the coin is also an exciting prize in itself.
When studying coins, you may encounter some unusual terminology. Even common terms, such as the heads and tails side of a coin, can have different meanings.
In Numismatics, the proper term for the coin’s front or head side is “obverse.” The back side of the coin, or the tails side, is typically called “reverse”.
As previously mentioned, the worth of a coin is attributed to its metal content. The term used to denote the inherent value of the coin is known as the “intrinsic value.”
In contrast, the number written on the coin itself is referred to as the “face value.” Modern coins typically have a much greater face value than intrinsic value.
This means that the coin’s buying power in the market is greater than the cost of the metal in the coin.
Paper money accentuates this distinction even further. A $20 bill’s value is worth more than the physical paper it’s printed on.
Example: The Presidential Dollar
A specific example of this comparison is the 2007 – 2014 Presidential Dollar. It is worth $1 when spent at a store or given to a bank. However, the metal in the coin is only worth around 4 cents.
You may also like: Metals Trading – How and Where to Trade Base and Precious Metals
What Is the Purpose of Collecting Coins?
Coins possess a wealth of history, rendering the collection a gratifying hobby. There are many reasons why people collect coins, such as the historical and artistic value, as an investment tool with a profit potential, and more.
Takeaway: You Can Understand Money’s Past by Studying Numismatics
Numismatics explains why people have appreciated coins and currency as collectibles over time.
The rich history of numismatics is deeply connected with the fascination and appreciation of coins by the nobles and royalty. Studying this discipline allows us to connect with the past through history.
