PMD (post mint damage), or someone playing a joke. Although it sort of looks like tarnishing. Hard to tell exactly from your photo. Welcome to CoinTalk
thanks for the welcome and reply. i bought 80 indian head pennies at an auction and this coin was in there.have you ever seen a coin with this type of ring on it?i have a 1858 flying eagle coin that has half a punch in it but it looks totaly different.heres a picture of the flying eagle coin.