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Digital Subscriptions > COINage > September 2019 > History of the Grading System

History of the Grading System

HOW A SMALL GROUP OF DEALERS CONVINCED COMPLETE NOVICES TO BUY COINS FOR BILLIONS
Image courtesy Heritage Auctions.
Image courtesy Heritage Auctions.

For those who have who been in the numismatic hobby for only 25 or 30 years, it is rather unimaginable that there was ever a period known as “BC”: Before Certification. Yet prior to the mid-1980s, there were no slabs, the popular sonically sealed, tamper-resistant plastic holders labeled with a coin’s grade and identifying information. This concept revolutionized the numismatic industry and opened the door for even more collectors, dealers, and investors to engage in trading rare coins, and often sight unseen.

But that’s not all third-party graders, or TPGs, have done. They have also established a set of tight grading standards for the industry and have helped provide a greater sense of security to those who wish to trade in rare and valuable coins. A generation after TPGs built an entirely new market in the hobby, the industry finds itself in a time and place where many people simply buy and sell coins on the merits of the grade and information printed on the small labels inserted into each sonically sealed plastic holder.

This has certainly made it more enticing than at any other time in numismatic history for complete novices to confidently and collectively spend billions of dollars on coins. This also means that fewer collectors and even coin dealers believe they have to learn the fine nuances of grading. Of course, this isn’t true, for everybody who is involved with the hobby should take the time necessary to learn the fine art of coin grading. Not only does this help him or her have a better knowledge of what a certain coin should look like in a given grade, but it can also provide these numismatists with a real understanding of the coins in those little plastic slabs and why each of those little collectible pieces of metal may have been awarded one grade versus another.

The evolution of the TPG industry is a colorful path charted by some of the industry’s most forward-thinking pioneers. These are people who have helped transform the hobby, making it decidedly safer for collectors and dealers to buy and sell rare coins with a degree of protection against counterfeit and altered coinage.

Over the past 30 years, more than half a dozen notable TPG companies have emerged, though it is important to focus on three that have been around for the long haul and continue to make an important impact on the market today. These include Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC), and ANACS, which in an earlier time was formally known by the name American Numismatic Association Certification Service. There are other important players as well, each of which will be profiled in this whirlwind history of coin-grading firms.

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Beckett CoinAge September 2019, Grading System : A Look Back, Untold Stories of Grading Services, And More....