Short History of the Origin of Coin Collecting and the Relation to Numismatics

Historians don’t agree when exactly numismatics started gaining importance. History proposes that the first traces of coin minting that can be seen date back as far as 11 centuries B.C.

Human communities have never failed to buy and sell supplies, stimulating commerce among countries, cities and each other. As commerce became more generalized and goods started flowing from afar, an acceptable common exchange denominator had to be found for the payment of goods.

Soon transactions took place with carefully weighed precious metals like gold or silver. Two main advantages emerged: it became obvious that swindlers could not operate easily any more and that commerce was facilitated. It didn’t take long for standardized coins to appear.

To this day, in some countries, people still accept payment in goods or propose goods or animals in guise of payment. Some South Africans accept cows as payment for “lobola”, or dowry. In North Africa, wealthy merchants merrily propose fathers to blonde daughters a string of camels in exchange for the future bride.

Numismatics could be described as the study of the evaluating of the true worth, or true market value of a coin. Julius Caesar was known to pay more for some type of coins that were no longer in circulation than what was considered their current face value. So, numismatics actually refers to the value of a coin, whereas coin collecting refers to the hobby.

Another example of numismatics that could be given was the run during the seventies in Switzerland on all coins minted before 1968. These contained such a high amount of pure silver, that when the world market price for silver started reaching heights never seen before, it became more interesting to melt the coins for their silver content, turning a nice profit in the process, than to keep them or continue paying with them.

The logic behind this action is easy to understand. Would you pay for a bottle of water worth 35 cents with a gold coin that fetches 1000$ on the market?

This had two consequences: Swiss mint stopped producing the high grade silver coins, and all coins minted before 1968 became rare, which made their collector value rise.

In the end, knowing the history of coins has a direct relation to coin collecting value and the numismatist’s fine tuned sense of the value, or true market price of a coin. Not knowing this history will jeopardize his ability to spot real opportunities.

Source by Theo Steward

Short History of the Origin of Coin Collecting and the Relation to Numismatics