The historical development of coins is a long and interesting history. When did the first coins appear? And what was their development?
Michal Masek: The coins are more than 2,500 years old. Sometime around 630 BC, they began to be issued in Asia Minor in the area of present-day Turkey. Interestingly, we do not have an exact date when the coins were created. There are two theories for this. One claims that they began to be issued in the Kingdom of Lydia. The second theory says that the release was based on a strong individual.
Michal Mašek is a well-known Czech researcher in the field of coinage. Since 2006, he has been the chairman of the Czech Numismatic Society (ČNS). He prepared a number of numismatic-themed exhibitions with members of the Czech National Academy of Sciences and in cooperation with important museums and church institutions. In 2012, he resumed publication of the Numismatic magazine. David Slezak has been active in commodity markets since 1994, focusing mainly on precious and rare metals. He introduced a number of projects in the field of investment gold and issues of collector coins to the Czech market.
According to her, it was in Ephesus, where they were issued by a magnate or merchant, and his name is known directly from the coins. It is signed on them. It is interesting that coins began to be minted immediately, not as a single denomination, but as we have a crown, two crowns, five or ten crowns, so they started minting from the smallest to the starters, which were the largest coins.
It can be seen that it was thought out and that it was not an accident. We, in our pride, believe that everything our ancestors came up with was an accident. In our opinion, the Camembert accidentally went moldy and the wine accidentally went bad. But why wouldn’t it be a targeted performance?
And what alloy did they use to make the coins?
Michal Masek: Gold and silver alloys were used. They were claimed to be natural alloys. Archaeologists and numismatists spoke at a conference about ten years ago, saying that it was a purposefully created alloy. But the alloy encouraged fraud. When you change the ratio of gold and silver in the alloy, you suddenly start making money. The addition of silver and the subtraction of gold began to be abused immediately.
It is possible that, for example, older coins have not survived, and that is why we say that these are the oldest, but this is just our ignorance. It happens quite often in archeology that other finds turn up.
Michal Masek: Yes, the date has already moved. Croesus was long the founder or inventor of the coinage, as claimed by Herodotus, but it was his grandfather Alyattes II. Within our two generations, coin dating has moved 50 years back in history.
Paying is actually an interesting interpersonal activity. We know since when trading was done using coins, but even before that, even if there was no medium of exchange, trades took place. It was possible with a barter exchange or counter service. But this had the disadvantage that it was not precisely measurable. Paying with money clearly defines both the relationship and the value.
After the earliest period, the invention of coin was used in different parts of the world. Where are the main centers that are still most often inflected today?
Michal Masek: I would like to add to that. There was no vacuum before coins, there were so-called pre-coin currencies. This is a very broad topic. Among the most famous pre-coinages are seashells, which were used in Africa until sometime in the 16th century.
They had a similar property to coins – they were durable and had an aesthetic effect. In London, the British bank had a regulation that they had to keep every currency in reserves, so they even had two chests of shells in their basements. But they have probably already canceled it and it is a historical anecdote.
But there are preserved golden crates, which are exhibited in the Israeli museum. They were about a quarter-pound gold rings that could not be put on the arm, so they were clearly not jewelry. It was clearly a standard gold ingot. Hryvnias could also be pre-coin currency, which could be made of silver or bronze, which is known from Celtic finds.
We use coins and banknotes according to the nominal value written on them. But the coin was originally a piece of metal that was marked with a stamp. And that was the publisher’s stamp. There was no face value on them.
Something similar are the ducats that were issued during the First Republic. Whoever used the coins had to negotiate their price. It is evident that the coin was a medium of trade, but it had no clear value. This led to people sharpening or scratching the coins. We see this on most surviving ancient and medieval coins.
This also gets us to the first fakes. Can we say that the moment coins started to exist, people started thinking about how to counterfeit them? Are there any funny stories about fakes?
Michal Masek: When there is something new, the first people to find out are the people on the edge. I personally have a coin in my collection that is from the mints of King Alyatto II. It is a fake that comes straight from the mint. It has a bronze core and is covered with a thin layer of gold. But it is an official stamp, which means that someone in the workshop had to strike it, get it out and pay with it.
Counterfeiting is actually an attack on the sovereign, so this activity was accompanied by harsh punishments. We know this from the time of Prince Soběslav, in whose decrees it was written that whoever damages or forges a coin forfeits to the prince.
Let’s take a leap forward. Are fakes being made today or is it just a historical thing?
David Slezák: Of course, with today’s technology, coin counterfeiting is no problem at all.
I know there are some strangely cheap pieces of gold being sold online. When one has them examined, one finds that they are fakes.
David Slezák: Gold has a specific gravity of 19,300 kg per cubic meter, which is 2.5 times that of silver. Tungsten and vanadium have similar specific gravity to gold. Counterfeiting is done by buying tungsten rods.
A kilogram of tungsten costs 45 crowns, a kilogram of gold roughly 1.5 million. Tungsten bars are coated with gold and you can’t tell by the weight at all. With coins, it’s exactly as Michal Mašek said. In short, the coin is covered with a thin layer of gold. People see that something costs a thousand crowns less and are happy to buy it.
Michal Masek: Counterfeits can be of two types. First, to the detriment of circulation and also to the detriment of collectors. Counterfeits to the detriment of the market have been created since ancient times, but today they are quite interesting for us. We certainly do not overestimate them, but a period fake from the Middle Ages is a sought-after piece today. It is part of history and has its telling value.
Counterfeits, to the detriment of collectors, are types of coins and notes where someone has noticed that the original pieces have a value and decided to reproduce them and sell them for a profit. Forgeries of coins, banknotes and postage stamps are now rampant in connection with 3D technologies. The market is literally flooded with them.
We have to be careful. Let’s look at the price development from a historical perspective. Collectors often talk about both gold and silver being holders of value. Applies to?
David Slezák: Gold in 1792 cost $19.39 (per troy ounce, editor’s note), today roughly 2,000. From my point of view, gold really is a carrier of value. The average appreciation of gold since 1971 has climbed from some 34.74 dollars to today’s level. If we take silver over the last 50 years, it has gone from five dollars to about $20.
I do not believe that silver is the metal of the future as many claim. In addition, the investor must account for VAT at the rate of 21 percent. I personally see praseodymium and neodymium as the metal of the future. Unfortunately, it is only mined in China. But they will work as a replacement for lithium batteries, they have a large capacity and are light. Use in electric cars is so easy. The question is whether electric cars are the way to the future.
The author is an editorial associate. You can find more of his interviews with interesting personalities on Offline Štěpán Křeček