Over the past few decades, independent coin grading has become an increasingly vital component in the world of coin collecting. Independent coin grading levels the playing field between the serious numismatist and the casual hobbyist by providing an unbiased third-party evaluation of each and every graded coin.
A Brief History of Coin Grading
In the mid 19th century, when coin collecting first began to gain traction in the US, there were only three grades used to evaulate the condition of coins: Good, Fine, and Very Fine. Obviously, this led to considerable variation within each category.
In an effort to better describe individual coins, coin dealers often resorted to attaching a descriptive phrase such as "Barely Circulated". Unfortunately, these phrases were often subjective and inconsistently applied. Early in the 20th century, efforts by numismatists and coin dealers such Howland Wood led to gradual standardization of coin grading terms.
Perhaps the greatest advancement in the art of coin grading came in 1949 when Dr William Sheldon developed a 70 point coin grading scale. On the Sheldon Scale, circulated coins receive grades from 1 to 58 with 58 being the highest grade. Mint State coins receive grades ranging from 60 to 70. A coin graded 70 is considered virtually flawless. Mint State coin grades are usually preceded with the designation MS, such as MS-70. Mint State Proof coins are designated PS.
In recent decades, the emergence of independent third-party grading services has virtually removed bias and subjectivity from the world of coin grading. These independent coin grading services such as ANACS, ICG, NGC, and PCGS are staffed with well trained and highly skilled experts in the art and science of coin grading.
Independently graded coins come incased in tamper-proof clear plastic slabs which specify the grade of the coin. When you buy an independently graded coin you can buy with confidence.
The Allure of a Perfect 70
It's no surprise that coins graded MS-70 or PS-70 are highly sought after among coin collectors. As a result, coins with a grade of 70 generally tend to appreciate in value far more quickly than coins of lesser grades. Even the slight difference in grade between 70 and 69 can be astounding. For example, an independently graded MS-69 1996 Silver Eagle Dollar has a current of value of a little over $100, the same coin in MS-70 grade is valued at over $4000!!!
Not All Coin Issues Yield MS-70 Specimens
Not all coins are available in MS-70 condition. For example highest grade awarded to 2009 Commemorative Lincoln Pennies (Kentucky, Indiana, Illinois, DC) is MS-67. This underscores the rare perfection of coins graded MS-70 or PS-70.
A Special Note About MS67 Coins
In many cases, MS67–not MS70– is the highest possible grade a coin can achieve. This grading standard applies to coins that have been issued for circulation (as opposed to “proof” or “frosted” coins which are never released into general circulation). A circulating coin labeled MS60 is generally regarded to be in “Brilliant Uncirculated” condition. Coins graded MS67 are a full 7 grades higher and represent the best of the best of all such specimens minted for circulation.
Coin Grading Considerations
Many factors are involved in the art of coin grading. For circulated coins, degree of wear is the primary consideration, but other issues such as quality of strike can also come into play.
Uncirculated Mint State coins have their own set of standards. Perhaps the most critical are luster and strike quality. Luster refers to how light reflects of the surface of the coin. Coins with more brilliant luster (often referred to as frosty or heavy luster) receive higher grades. Strike quality is also essential. Whereas a well struck coin is likely to receive a high grade, a poorly struck coin or a coin deemed to contain mint flaws will be downgraded.
Perhaps the most intriguing factor in grading Mint State coins is called toning. Toning refers to a thin chemical layer that naturally occurs on the surface of coins. A very thin layer can have a prism-like effect on the light reflected from the coin, granting subtle fleeting hints color to the coins appearance. This can add to a coins grade and desireability. However, thicker layers will give a coin a dull yellow, brown, or even black appearance, radically reducing a coins grade and value.
Major strides in the art and science of coin grading over the past 150 years have removed most of the uncertainty from coin collecting. Armed with an understanding of the Sheldon Scale, and benefitting from evaluations performed by impartial third-party grading services, today's coin collector can purchase independently graded coins safely and confidentally. And that is Very Fine, indeed.