What Makes A Coin Valuable?

Numismatics, or coin collecting, is a popular hobby. Whether you search through spare change for state quarters, gather coins from specific years or purchase proofs as an investment, collecting can provide the opportunity to learn more about the history of our country. Coins usually have value as currency on the street, but how can a new collector learn what, if any, additional value may be attached to his or her collection.
Surprisingly enough, age isnt the only feature that makes coins valuable. In the United States, coins are valued based primarily on the scarcity of the item and its condition. For Modern U.S. coins like the American Eagle silver coin, this is even more true.
What makes a coin scarce? Several factors, but often there is a strong historic tie. For example, almost any coin in recognizable condition that was minted in San Francisco in 1870 would be considered very valuable. This is because 1870 was the first year of operations for the San Francisco location so relatively few coins were produced. A more extreme case can be found by the 1933 Sain-Gaudens Double Eagle coin. This was the year President Roosevelt took the country off the gold standard. All gold coins were recalled, but a handful did not make it back to the mint for melting. One of these coins was discovered in 1992 (and confiscated by the Secret Service.) The face value of the coin was $20, but in 2002 the coin was sold at auction for more than $7 million dollars.
Another more recent example is the Aluminum penny produced in 1974. Copper was in short supply in the early 1970s so the US Mint tested alternatives to make producing the penny more cost effective. The aluminum version of the penny was sent out to select VIPs, but then never recovered. Some coins are considered rare because they may reflect a defect in the minting process, although identifying which of these errors are legitimate usually requires an experts eye.
Another key concern is the condition of a coin. Coin collectors in the U.S. use the Sheldon Grading scale. The scale gives values ranging from1, for a barely recognizable coin, to 70 which is an ideal but only exists in theory perfect coin. Most coins fall in the range between 8 (for very good) to 50 (almost uncirculated). Uncirculated coins have a further scale starting at 60. Anything above 66 is rarely seen.
In conclusion, for casual collectors two pieces of advice. First, dont alter your coins. Colorized, marked or even cleaned coins can all be classified as altered. Alterations can severely limit, if not destroy any collectors value for a coin. Secondly, if you have questions about a coins value do some preliminary research yourself there are many organizations like the American Numismatic Association where you can learn more. then if you believe you need more help, contact a reputable expert.