When I began my career as a Numismatist in 1993, third party grading and certified encapsulated coins were still considered a relatively new concept. Thinking back (Wow, how time flies!) I would say that less than 50% of all U.S. rare gold & silver coin transactions were certified and encapsulated by either PCGS or NGC at that time.
Today, certified rare coin transactions represent well over 90% of business conducted between coin dealers, auctions, and private estate sales.
I know that the majority of our business transactions back in 1993 was still mostly with "raw" coins (un-certified) and we used our numismatic expertise to properly or "subjectively" authenticate, grade and place a value on each coin we offered to our collectors and investors.
Now, keep in mind, as a reputable rare coin dealer we provided a 100% guaranty of our grading standards. If for any reason a client felt uncomfortable with the grade and value we assigned a coin, we provided a 100% money back guarantee policy, but again, the grading of "raw" uncertified rare coins by any coin dealer or seller was and to this day is considered "subjective." In other words, their "opinion."
If you were a U.S. rare gold & silver coin collector and or investor prior to 1986 with an untrained eye, if you could not distinguish the grade level between an Uncirculated Mint State-63 and a Uncirculated Mint State-65, you were at the mercy of the seller who established the authenticity, grade, and value of a coin.
Back then, from the classic Morgan Silver Dollar to elusive key-date United States rare gold & silver coins, how could one be certain that a coin was authentic and accurately graded?
In this blog post, we will break down the fascinating origin and world of rare coin authentication, grading, and certification, shedding light on the industry's standards and procedures.
The Third-Party grading services (TPGS) Professional Coin Grading Service (PCGS), founded in 1986 and National Guaranty Corporation (NGC) founded in 1987, eliminated a problem many collectors and investors with an untrained eye faced before 1986, by establishing industry wide accepted standards and guidelines for authenticating, grading, and certifying rare coins across the board and 100% guaranteeing the authentication and grade for each coin they certified.
Coin dealers could now submit "raw" uncertified coins to either of the two certification companies to be authenticated, graded, and certified and leave their "subjective" opinion out of the equation.
Before 1986, or the "pre-certification" era of United States rare coins, the term "subjective" was often the reason and determination a seller/dealer would give to a buyer why a particular coin was of a particular grade and value. For example, let's say you were very interested in acquiring a $20 Liberty Head Double Eagle, you were more than likely to hear a phrase from a coin dealer or the seller much like the following "coin grading is all subjective, one dealer might grade a coin Mint State 63 while another might grade the same exact coin a Mint State 64."
With so much riding on the opinion of sellers and coin dealers, a coin's grade and condition could vary widely. It was difficult for novice investors and collectors to justify acquiring coins of any significant value.
(Even a one-point difference in a coin's grade could mean hundreds or even thousands of dollars in cost and loss of value to collectors and investors)
In 2007, one of the founding members of PCGS and then soon after the founder of NGC, John Albanese, founded Certified Acceptance Corporation (CAC).
The Company was formed based on the concept that after 20 years of certifying coins, PCGS and NGC's grading standards may have been a little too stringent (at least in the beginning) and there was a good percentage of encapsulated coins that were "undergraded" and coins that should be treated and noted as exceptional for their grade trading in the market.
The CAC business concept was to allow the submission of previously certified coins by PCGS or NGC to be submitted for further review. Simply, if they felt a coin was "undergraded" they placed a gold sticker on the encapsulated coin.
In short, here is an example: Let's say there was a particular coin with 100 known examples to exist in let's say Mint State 63, if CAC felt the coin was a top representation of all 100 coins graded in Mint State 63, it would place a green sticker on the submitted coin. This basically meant that CAC felt the newly green stickered coin was in the top 10% to 15% for its grade. As a collector or investor you now could feel comfortable that you owned one of the top 10 or 15 coins out of the 100 graded Mint State 63. I hope that was an easy explanation for you to understand. You can always message or call us if you would like more information.
In addition, CAC has recently announced and begun providing their own grading service submission entity, Hooray!!!
If you haven't noticed, At Minuteman Rare Coin Numismatics we prefer any coin attached to a CAC sticker and look forward to their new grading service and the coins they grade and that will enter into the world of the United States gold & silver rare coin market. At MMRC Numismatics we acquire, offer and recommend CAC coins whenever they are available.
United States rare gold & silver coins have long captivated the attention of collectors and investors worldwide. As precious historical American symbols, they possess both monetary value, intrinsic value and cultural significance. However, determining the authenticity, condition, and grade of these coins requires a meticulous process. So let's begin.
Section 1: Understanding Coin Authentication:
Coin authentication is the crucial first step in determining the genuineness of a rare coin. Experts employ various methods and techniques to authenticate coins. Authenticity is paramount when it comes to rare coins. Collectors and investors seek assurance that the coins they acquire are genuine and not counterfeit or altered. To determine the authenticity of a United States rare coin, several factors are considered:
1.) Visual Examination:
Skilled numismatists thoroughly inspect the coin's design, such as the placement of letters, numerals, or images, this aids them in determining if the coin matches the specifications of its corresponding minting year. They inspect a coin's edge characteristics, weight, diameter, metal composition, mint marks, and other visual features. They compare these characteristics to reference materials, comprehensive catalogs, reference books, and online databases.
These are essential resources for comparing and identifying genuine coins. These references help experts identify known counterfeits and guide them in their authentication process.
2.) Numismatic Research:
Extensive research on historical records, die varieties, and minting practices helps authenticate rare coins. Numismatists cross-reference minting details and compare die characteristics. They compare these attributes with known authentic coins to identify any inconsistencies.
3.) Advanced Technologies:
In recent years, advanced technologies such as X-ray fluorescence (XRF) analysis and spectroscopy have been employed to authenticate coins. These non-destructive testing methods help determine the metal composition and detect any inconsistencies that may indicate counterfeiting.
Section 2: Grading Rare Coins:
Once a coin is authenticated, the next step is to determine its condition through a process called grading. Grading refers to the evaluation and assessment of a coin's condition. The condition, or grade, of a coin plays a crucial role in determining its value.
1.) Coin grading:
Coin grading evaluates the level of wear and overall preservation, providing a standardized assessment of its quality. The most widely recognized grading system in the United States is the Sheldon Scale, which ranges from 1 to 70, with 70 representing a perfect, flawless coin.
This step plays a vital role in determining a coin's market value and desirability. Graders refer to industry-accepted grading standards and guidelines established by prominent Third Party Grading (TPGC) companies such as Certified Acceptance Corporation (CAC), Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC). These grading standards provide a consistent framework for evaluating and assigning grades to coins.
When professional coin graders evaluate the condition and quality of coins, they use several key factors, including:
2.) Surface Preservation:
Numismatists examine the coin's surface, scrutinizing its wear, luster, marks, and overall preservation. The absence of wear, scratches, and damage is vital in determining a coin's grade. The presence of mint luster, a coin's original shine, is highly desirable.
They evaluate the coin's strike quality, which refers to the sharpness and clarity of the design elements.
3.) Strike Quality:
They evaluate the coin's strike quality, which refers to the sharpness and clarity of the design elements. The sharpness and completeness of the design's details play a significant role in grading. Well-struck coins with crisp and distinct features receive higher grades.
4.) Eye-Appeal:
The overall visual appeal, including coloration, toning, and aesthetics, contributes to a coin's grade. Attractive coins with appealing patina or toning are often more desirable among collectors and in many cases will cost or be valued at a premium to its counterparts that have the same grade and certification level.
Once graded, the coin is encapsulated in a tamper-evident holder, ensuring its protection and integrity throughout its lifetime. So now that we know how United States Rare Coins are authenticated and graded, the question now is, how are they certified?
Section 3: How Are Rare Coins are Certified?:
Certification of of rare coins adds an additional layer of trust and confidence and provides collectors and investors with assurance and validity regarding a coin's authenticity, grade, and value. Certification further enhances the value and marketability of United States rare coins.
Third-party grading companies such as Certified Acceptance Corporation (CAC), Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC), are trusted entities that specialize in grading and certifying coins.
The certification process typically involves the following steps:
1.) Submission:
Collectors and dealers submit their coins to a trusted Third party grading service for evaluation and review. The coin can be "raw" as we discussed earlier, or it can be an already previously certified encapsulated coin. Coins are carefully handled to prevent any damage during the process.
2.) Grading and Authentication:
Expert numismatists at the grading services assess a coin's authenticity and grade using established standards. The coin's grade and authenticity are verified by an independent and unbiased team of experts. This impartiality adds credibility to the certification.
Once a coin is authenticated and graded, it is encapsulated in a tamper-evident, sonically sealed holder with a certification label. This holder protects the coin from environmental damage and ensures its long-term preservation. Verification:
3.) Encapsulation:
Once a coin is authenticated and graded it is securely encapsulated in a hard sonically sealed plastic holder, also known as a slab, along with a certification label. This protective holder prevents tampering, preserves the coin's condition, and displays relevant information. The holder also includes detailed information about the coin, such as its grade, date, mintmark, and variety. The certification label enhances the coin's marketability and provides important details for potential buyers and or sellers.
4.) Unique Serial Number:
Each certified coin receives a unique serial number, which is recorded in a centralized database. This number allows collectors and investors to verify the coin's authenticity and grade through the certification company's online verification system.
5.) Population and Census Reports:
Third party grading services offer online "population" or "census" reports, allowing collectors and investors to know how many coins in a particular grade are known to exist in certified condition from that particular grading service.
Conclusion:
United States rare coins are not only historically significant symbols of our great Nations history and heritage but also valuable investments. Authenticating, grading, and certifying these coins are integral to ensure their genuineness, quality, and marketability.
The process of authenticating, grading, and certifying United States rare coins to determine their value is meticulous and multi-faceted. By relying on the expertise of numismatic professionals, advanced technology, and established grading standards, collectors and investors can confidently acquire rare coins with verified authenticity and accurate grades. Certification adds an extra layer of trust, confidence, and assurance that the coin's information is properly authenticated and graded, securely recorded and its value to be more easily determined and established.
By understanding the processes behind coin authentication, grading, and certification, collectors and investors can make more informed decisions and expand their numismatic knowledge.
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What's the number piece of advice we give our clients?
"Always acquire the best coins you can afford!"
Sincerely,
Edward Walsh, President
Minuteman Rare Coin Numismatics
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