Coin collecting is a hobby and trade as old as mankind—dating back as far as the fourth century B.C. It remains a passion to many today that can be equally intriguing as well as financially rewarding.
Understanding how modern coin collecting works can be bewildering— especially trying to comprehend coin grading and its importance. For those who are new to the coin collecting world, we thought it would be in good taste to share some insight with you behind how coin grading works for numismatics.
Initially, coins were not simply forms of currency used in society, but they were viewed as delicately-crafted works of art. Most ancient coins included depicted images of notorious rulers, historic battles and events, and mystical creatures.
As time progressed, coin collecting became a “hobby for kings” being practiced exclusively by the upper-class societies and royalty in the 15th and 16th centuries.
By the turn of the 19th century, most of society had the financial means and access to coinage to start developing their own coin collections. The vast majority of the coin collections held by the average citizens contained national currency that was circulated and issued by governments.
Prior to the formation of the Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC) in the United States, the valuation and grading of historic and modern coins was very difficult. The physical condition of the coin is always used as the primary baseline in assessing the value of any collectible coin.
The Sheldon Scale
William Herbert Sheldon invented a rudimentary scale for grading coins in 1949.
Nowadays, most reputable grading companies like the Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation abide by the same scale in a more precise version. Early on, there were just three broad categories into which coins were classified, which included the following:
Good (G): to qualify, these coins must maintain the majority of the design details fully intact.
Fine (F): to qualify, these coins must exhibit clear detail and still retain some luster on the surfaces.
Uncirculated (UC): to qualify, these coins should never have been in general circulation and still exhibit their full mint state condition.
Although a great stepping stone, the coin grading scale still needed to evolve as it was later realized that the categories were too broad. Even two Fine coins could have subtle differences that weren’t enough to complete isolate them, but enough to need a value to differentiate them from one another. This led to the Sheldon Numeric Scale, which expanded upon the original concept to include numerical grades from 1 to 70, with 70 being the highest possible grade—representing a perfectly mint coin with no flaws.
Today, the Sheldon Scale is divided into three broad categories:
Circulated: Grades 1-45
These are coins issued for public use as a currency in most cases.About Uncirculated (AU): Grades 50-58
These coins have never been issued publicly, but they still may show evidence of wear making them not in the mint state.
Uncirculated (UNC/MS/PR): Grades 60-70
These are coins that did not enter public circulation and are in a mint state—retaining the original characteristics produced by the mint. The grade may also include MS for mint state or PR for proof, meaning the coin was struck in a special format for collectors.