Author Topic: What is a Coin: Definition  (Read 5654 times)

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akona20

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What is a Coin: Definition
« on: May 04, 2012, 05:28:16 AM »
On another place on the boards there is a discussion about a "fake" coin. the question is simple and that is "is it really a coin at all?" It certainly looks like a coin, it was produced by coin dies but it has been been advised that it was never meant for circulation. Does this then preclude it from being called a coin?

It is obviously a store of wealth, that is taken but does that agin make it a coin?

Offline Md. Shariful Islam

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Re: What is a Coin: Definition
« Reply #1 on: May 04, 2012, 08:15:21 AM »
On another place on the boards there is a discussion about a "fake" coin. the question is simple and that is "is it really a coin at all?" It certainly looks like a coin, it was produced by coin dies but it has been been advised that it was never meant for circulation. Does this then preclude it from being called a coin?

It is obviously a store of wealth, that is taken but does that agin make it a coin?

Very good question and we should discuss on this topic. Before we attempt to answer this question we should define 'coin' itself. In your passage I find that you wanted to emphasize on 'circulation' for a 'coin' to be coin. If it is the condition, then a coin is ccoin if it is meant for circulation and the fakes which were cntmporaroly made by fakers for circulations are also 'coin'. Again the proofs and proof likes and commemoratives and rejected errors are not coins even if they are made by using original dies as they are not meant for circulations.

Islam

Offline Figleaf

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Re: What is a Coin: Definition
« Reply #2 on: May 04, 2012, 12:48:00 PM »
A very personal answer. Coins are money. Therefore, they have to have the same general characteristics as money. Economic theory demands three elements - it must be all three, not any combination of the three - before it will call anything money. It must be:
  • a medium of exchange
  • a unit of account
  • a store of value
Beginning with the last, the words "store of" are important. A coin can have value by itself, but what is decisive is that people trust that, in the end, they are able to receive the value of the denomination for the coin. In other words, they must be confident that it will not lose all or most of its value in the short term. A USD banknote is money in the US, but not in France, where it can be readily bought and sold for money. It is money in Zimbabwe, but not in Russia.

Unit of account may be more important than you think. People can deal with different weights and denominations if they can be expressed in a denomination they are familiar with. A good example is the florin, a lightweight coin struck on German standards by Dutch mints. To get it accepted, it carried the indication 28, for 28 stuivers. The stuiver was the unit of account for small transactions. By connecting the florin to that unit, however awkwardly, it became money. There are a number of gold and some silver coins without denomination that fluctuated freely against the unit of account. They are not money, but stamped bars of a metallic commodity.

The demand that most people are willing to ignore is medium of exchange. I think, that a coin is not an objet d'art, a goal in itself. It is a tool for making small payments. If it cannot be used as a medium of exchange it is not money. A coin cannot be used as money if it is issued above its face value or if it is not generally accepted or if its use would have been illegal (this applies to some rare date US coins.) A coin used for presentation or religious purposes only, like the one Akona referred to, is not money. A currency that is legal tender but not generally accepted (e.g. the ZIM dollar) is not money. A generally accepted halfpenny token may not be legal tender, but it is money (so legal tender status is irrelevant for money status.) Cigarettes may work like money in prisons, but that does not make them generally accepted, so they are not money.

I stress that all this depends on my central thesis that coins are money. Nevertheless, above statements on coins and money are true by themselves. I note that "coin" has come to be used for anything flat and vaguely round of shape, from challenge coins and shop caddy coins to gold pieces used as gifts or for diplomatic purposes and jewelry. It is not a usage I appreciate or share, but I know language will develop and it is useless to resist that. I also do not want to imply that people should or should not collect one thing or another. As I said, a personal reply, but at least with a reasoning behind it.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline <k>

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Re: What is a Coin: Definition
« Reply #3 on: May 04, 2012, 02:34:13 PM »
I quote from memory something I read in the early 1980s that intrigued me at the time:

A coin has four values:

1] Its face value

2] Its intrinsic metal value

3] Its marketable numismatic value

4] Its sentimental value to the collector
Visit the website of The Royal Mint Museum.

See: The Royal Mint Museum.

Offline asm

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Re: What is a Coin: Definition
« Reply #4 on: May 04, 2012, 03:07:46 PM »
I stress that all this depends on my central thesis that coins are money.
I would disagree with what Peter has said about a coin being money. What he mentions is reasonably correct if we are talking about current and circulating issues. However, what about the demonetized or withdrawn from circulation issues......... Are they not coins? They are not legal tender, they can not be exchanged for money (any longer), They have a value in a currency which no longer exists so can not be used as a medium of exchange......, but they are still coins.

I note that "coin" has come to be used for anything flat and vaguely round of shape, from challenge coins and shop caddy coins to gold pieces used as gifts or for diplomatic purposes and jewelry. It is not a usage I appreciate or share, but I know language will develop and it is useless to resist that.
NCLT are still coins and so are the fictitious bullion "coins" and are collected as investments by quite a few collectors......

I also do not want to imply that people should or should not collect one thing or another.
I agree there.

Amit
"It Is Better To Light A Candle Than To Curse The Darkness"

Offline Figleaf

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Re: What is a Coin: Definition
« Reply #5 on: May 04, 2012, 04:02:48 PM »
Clarification: if you are interested in history, rather than economics, coin are money means a coin is or has been money at any time. A Kruger rand never was money. A sovereign struck before 1816 was money. A sovereign struck after 1918 was not money. A mohur dated 1202 is money. A gold mohur dated 2002 would not be money.

I have taken easy examples for clear illustration. Things are not as black and white as on these examples. Between 1816 and 1918 the sovereign lost its function as a means of exchange, but it was still store of value. It didn't happen on any specific date, but over time.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Md. Shariful Islam

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Re: What is a Coin: Definition
« Reply #6 on: May 04, 2012, 06:18:43 PM »
A mohur dated 1202 is money. A gold mohur dated 2002 would not be money.

Peter

A gold mohur dated 1202 struck around 1210 but not in official mint but by a faker for using it as a means of transaction and that fake one had had circulations successfully deceiving people of that time. Is it a coin?

Proofs. Are they coins?

Offline Figleaf

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Re: What is a Coin: Definition
« Reply #7 on: May 04, 2012, 07:30:01 PM »
I'd rather discuss if it is money or not. Your hypothetical mohur comes into the shadow area. Economically speaking, as long as it is unchallenged as a fake, it would be money (M1), because it is generally accepted. As soon as it is discovered to be a fake and no longer generally accepted, it is no longer money. Think of Burmese fakes of Indian rupees. As they were accepted for lack of official money, I see them as money. Same thing for khachha pice. Not official, but money.

From a historical point of view, your hypothetical mohur was once money. Personally, I would find it worthwhile to collect it, though not at the price of the genuine article. Indeed, I have some very interesting contemporary forgeries in my collection. However, I can easily understand people who would argue that since it is a fraud (even a contemporary fraud) they do not want to collect it.

Proofs cannot circulate, because they cannot be issued at face. Therefore, proofs are never money.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Md. Shariful Islam

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Re: What is a Coin: Definition
« Reply #8 on: May 04, 2012, 07:44:24 PM »
I see them as money. Same thing for khachha pice. Not official, but money.

Proofs cannot circulate, because they cannot be issued at face. Therefore, proofs are never money.

Peter

I just cannot but agree with you. I don't want to mix up with the terms 'coin' and 'collectible'. People collect what not? Question is as a numismatist what I shaould collect and what I should not. For answering this question this thread is really worth to note.

Islam

Offline andyg

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Re: What is a Coin: Definition
« Reply #9 on: May 04, 2012, 07:47:13 PM »

Proofs cannot circulate, because they cannot be issued at face. Therefore, proofs are never money.


I've received some coins in my change over the years that were originally issued as proof, then spent quite some time circulating...
always willing to trade modern UK coins for modern coins from elsewhere....

Offline Md. Shariful Islam

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Re: What is a Coin: Definition
« Reply #10 on: May 04, 2012, 07:57:10 PM »
I've received some coins in my change over the years that were originally issued as proof, then spent quite some time circulating...
Those were not meant to be money but became money. In Bengal shells (Kowri) were used as money (medium of exchange) but actually God made them for protecting a sea species.

Islam

Offline andyg

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Re: What is a Coin: Definition
« Reply #11 on: May 04, 2012, 08:07:01 PM »
Those were not meant to be money but became money. In Bengal shells (Kowri) were used as money (medium of exchange) but actually God made them for protecting a sea species.

Islam

It muddies the waters somewhat, proof versions of circulating coins can be spent and will circulate before someone else notices - they just cannot be bought at face value the first time - but what of the next 50 uses they get?  Does the above criteria make them fake in some way?

Quote
People collect what not? Question is as a numismatist what I shaould collect and what I should not. For answering this question this thread is really worth to note.

There is no easy answer as to who is right or wrong - but does it really matter from a collecting point of view?  You could collect used tea leaves if you wanted - as long as you enjoy what you are doing then it doesn't really make much difference :)
always willing to trade modern UK coins for modern coins from elsewhere....

Offline Md. Shariful Islam

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Re: What is a Coin: Definition
« Reply #12 on: May 04, 2012, 08:20:08 PM »
It muddies the waters somewhat, proof versions of circulating coins can be spent and will circulate before someone else notices - they just cannot be bought at face value the first time - but what of the next 50 uses they get?  Does the above criteria make them fake in some way?

That really muddies. I was looking at my profile picture proof coin. I know all proof coins are not  same but for this one I had to pay 3300 while it writes 10 on its face. If ever one ounce silver comes down to 10, only then it is possible to make it circulate. In present condition simply it will stuck again to some place or will be melted.

Offline chrisild

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Re: What is a Coin: Definition
« Reply #13 on: May 04, 2012, 10:05:09 PM »
Proofs cannot circulate, because they cannot be issued at face. Therefore, proofs are never money.

If that means "proof only" issues, I agree. However, proof versions of regular coins may very well circulate. If I decide to open up a proof set, grab the coins with my greasy fingers ;D and decide to spend them at a store, the cashier will (in most cases) not even make a comment but simply take them, and possibly hand them over to the next customer. Ta-daa, they circulate.

Christian

Offline Figleaf

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Re: What is a Coin: Definition
« Reply #14 on: May 04, 2012, 11:07:17 PM »
Yes, it does mean proof issues. Since proofs are made in a highly uneconomical and inefficient way, they cost too much to be circulated at face by the issuer. In economic terms, they become money when they start to circulate. In historical terms, those that circulate are the exception that confirm the rule that they aren't money. The same goes for patterns, essaies, and piedforts. That's a handy by-product of the "coin = money" thesis. It rejects plenty of the hyper-expensive stuff.

In my personal collecting terms, I don't care much if someone at one time lost a proof in circulation, just as I don't care if a scrap dealer releases 26 coins in the country of issue so he can call the other 499 974 pieces "circulating coins." Likewise, I don't care if 15 shopkeepers accepted a token in payment between 10 and 12 am one rainy Tuesday. ;)

Just to confuse you :), in my personal collecting terms, I accept pieces that can circulate in theory but do not circulate in practice, such as 5 euro pieces of countries that issue them at face. That shows you how consistent I am in the shadow zone. However, in economic terms, the issue is again straightforward: when they don't circulate, they are not money, those that do circulate are.

I don't expect anyone to agree or disagree, but I note only asm rejects my "coin = money" central thesis. The others nibble at the edges, where the edges are not very sharp to begin with. I don't actually think we need a sharp definition of what a coin is. We need only something that will throw up a wall against the sort of crass, senseless and sensationalist commercialism that calls a flat round metallic piece that weighs a kilo a coin.

And BTW, if tea bricks are covered by your definition of used tea leaves, I think they are money. :)

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.