Coin Collecting for Beginners: What are coins?

In all countries of the world official laws define the issuing process of coins. Coin motifs, values, size and weight are defined in these laws and the metal used, the type of rim and inscriptions on the coin are exactly described. Often the head of state has to sign these coin laws and many states take the decisions long before the coin is actually minted. The minting procedure is fulfilled in authorized mints, mostly owned by the state. Strict security is kept at all times of the minting process, as the value of each coin is guaranteed by the state.

All coins in the world have the same characteristic details:

Coins can be commemorative coins, currency coins or bullion coins:

COMMEMORATIVE COINS are minted to commemorate specific events, personalities or places - the decision about which issues to commemorate is taken by the government and implemented in the documents about coin issues in a specific year. Commemorative coins are mostly struck in precious metal like silver or gold. Their issuing purpose is not to supply the public with means of payment - they are used for state representation and are also sold to collectors within and outside of the country.

Commemorative coins often have higher value than stated on the coin itself - for this reason and for the reason that they are bought by collectors, who want to complete their collections, they hardly ever appear in circulation. Most commemorative coins are issued in the best minting quality "proof", a minting technique which only uses polished silver blancs and which involves several striking steps and highly manual control, in order to result in an absolutely flawless, shiny coin.

It is obvious that this "proof" quality is not possible to strike in huge quantities. Most commemorative coins are only issued in limited numbers, which are strictly controlled by law. 

Sometimes the demand for such limited commemorative issues is bigger than the number of coins issued. Because the coin law makes an increase of quantity impossible, collectors than have to try to buy these coins from other collectors, who have been faster buying them, and often pay significantly more than the original issue price. It is therefore important for collectors to have regular access to information about new coin issues and the option to buy them first. Some new commemorative coins will be sold out within days or hours of their issue, especially when the limitation is very low.

CURRENCY COINS

Currency coins are coins, which are minted for the everyday use as means of payment. They are usually struck in huge quantities, falling out of the striking machines directly in big bags, which are then delivered to banks for distribution.

Some collectors specialize in collecting currency coins from all the issuing years - and in order to satisfy these collectors there will always be limited numbers of year sets and specifically packed coins. These coins are normally sold "uncirculated", which means that they are part of the "mass-minting" process, but do not go into circulation and are therefore in much better qualitative state than the other coins, which are transported in big bags and go into circulation.

Year Sets and other coins meant for sale to collectors are carefully packaged and ideally contain certificates of authenticity, which contain the most important issue information. Some yearsets can be more valuable than others - examples are first issues when new coin motifs are used, last issues of old coin motifs and other special events, which make the specific yeardate stand out. These outstanding issues can sometimes even be issued in refined versions, e.g. plated with precious metals, and can then become sought after collectors' items.

BULLION COINS

Bullion coins are coins without face value - they are minted in precious metals like gold and silver and issued each year with the same or varying motifs. Their purpose is investment - collectors buy them instead of gold- and silver bars in order to accumulate precious metal to their investment portfolio.

The price of bullion coins depends on the size and weight of the coins and on the actual silver- or gold price on the day of the issue. Some collectors specialize in bullion coins and buy issues from every year, some collectors buy all available sizes of coins each year. Acquiring the new bullion coins is normally fairly easy, but collectors who want to complete their collections with older issues, sometimes struggle to find them in great qualities.

Important coin dealers with good relations to state mints and collectors all over the world will normally be able to give access to limited quantities of older coins, and the prices depend on quantities available, quality of the coins and other factors, which can increase coin values significantly over the years.