The numismatic database project is designed to provide all information any coin collector or numismatist would need regarding a coin, medal or note of interest.
What Determines a Coin’s Rarity?
Rare coins, highly sought after by coin collectors and dealers alike, hold high value and prestige, though determining what exactly defines a coin’s rarity is not always black and white. Multiple, interlinking factors affect the estimation of rarity, and up until recently, these calculations were only made by coin and currency experts known as numismatists. Employed by large grading companies, these numismatists draw conclusions based on their own research and knowledge. While these experts’ opinions have been widely accepted by the coin industry, their interpretations of this multi-faceted data are just that: opinions.
With the use of computer technology, Numis DB is aiming to update this antiquated practice by being the first company to make a coin’s determined rarity an indisputable fact. Their unprecedented use of AI and big data to bring massive amounts of data together in a way that no human being could do on their own, will finally bring solid, concrete answers to the ever-evolving questions of coin value. Today we’re going to discuss the many complicated factors that go into determining coin rarity, and how Numis DB aims to not only preserve, but improve the time-honored traditions of coin valuation with modern technology.
Coins in Circulation
At its most basic definition, a coin is deemed more rare the fewer there are of them in existence. Knowing the number of coins that were originally minted in the first place of a particular coin is a large part of this equation, though it’s not always that simple. Limited edition coins, for example, often only have a small number produced for a short period of time, and have therefore always been more rare. More common, mass produced currencies, however, can acquire rarity over time as fewer and fewer remain in circulation.
A great example of this is the Pittman Act of 1918, which resulted in the melting down of over 270 million US Morgan Silver Dollars to be made into silver bullets during WWI. While a provision to the act later led to a replacement of every silver dollar that was melted down, the Morgan Silver Dollars specifically dated 1878 - 1904 became an extremely rare find, as so many of them were lost to the melting pots. This is where availability comes into play and thwarts the calculation. Even if a coin was initially mass produced, different circumstances can lead to their numbers in circulation decreasing, and can therefore become more rare.
Another factor that greatly affects a coin’s availability and thus, its rarity, is a coin’s popularity, which can be gained for many reasons. Some coins gain popularity simply because they are already known to be rare: There are only a few of them known to be in existence, and are therefore highly coveted. Other coins, regardless of their number in circulation, can be popular for a variety of other reasons, such as their limited edition status, an interesting design, or usage of a non-traditional metal. Their popularity drives the coin’s rarity up, as collectors will often hold onto these pieces, and in turn, less will be available on the market. In this way, coins that by other definitions should be worth less, will hold higher value and be deemed more rare, simply because of the law of supply and demand.
In short, a coin’s number in circulation, its market availability, and its level of popularity can all affect the determination of a coin’s rarity and value in varying degrees, making it next to impossible to gain a concrete definition without the use of precise computer programming.
Another factor that adds into the complex equation of rarity is considering a coin’s quality, or grade. Coin grading is the traditionally subjective process of considering five components to determine a coin’s condition: strike, luster, surface preservation, coloration and eye appeal. (More on Numis DB’s goal to rid coin grading of subjectivity later.) The older the coin, the more wear it will tend to obtain. As a coin cycles through circulation, nicks, scratches, and damage to the surface or rim are common, so finding an older, high quality coin is a rare find indeed.
Most coin certification companies use similar versions of a grading system with a verbal and numerical scale (1-70). A higher grade signifies a coin is close to its original mint condition. As every individual coin will obtain various amounts of wear, coins of the very same mint can hold vastly different values. A coin in excellent condition with a high grade will be considered more rare (and thus hold more value) than the very same type of coin in poorer condition with a low grade.
A New Method
Because all of these factors interact with one another in an infinite amount of ways, determining a coin’s rarity and exact value is no easy feat. Though numismatists do their best in delivering a well-informed conclusion, it cannot be denied that the process is highly subject to human error, and often results in a variety of differing opinions.
Numis DB is breaking the mold by bringing AI and big data into the practice of coin valuation to expunge the industry of guesswork. Using this technology to bring the consideration of all of these complex factors together, Numis DB aims to make the conclusion of a coin’s rarity and value concrete facts. Additionally, their current work in progress of adding image recognition technology to the Numis DB app will bring coin grading out of the realm of conjecture, and bring an instant verdict of a coin’s grade with a simple snap of a photo.
The history and tradition of coin valuation goes back for centuries, and the embrace of modern-day technology into these time-honored practices will not only bring the coin industry fully into the 21st century, but allow it to reach new levels of certitude and accuracy like never before.