With technology always improving, it seems as if counterfeit coins are becoming both more prevalent and more difficult to distinguish from the real article. It seems like this has become a cottage industry in places like China, where counterfeiting can't be prosecuted. Do you think it'll one day be possible to create a counterfeit coin which is impossible to differentiate from a genuine one? The ultimate effect of an indistinguishable counterfeit could be two-fold. First, there could be a great increase in accepted supply, which would lower the most counterfeited coin prices substantially. Or, in an attempt to preserve those coins which are known to be genuine, the wholesale voiding of coins without extensive provenance could occur. A genuine 1916-D Mercury you may have bought from a flea market could be labeled as suspected counterfeit just because its history could not be traced for any appreciable amount of time. The result of this would be many genuine coins becoming worthless, while the rest would increase substantially in value. Of course, as counterfeiting technology improves, so may counterfeit-detection technology. Hell, it may someday be possible (or even possible today) to test a coin's striking age using non-destructive methods (kind of like carbon dating). What's your opinion of this sort of possible problem? Do you think that it is unlikely enough that it will never become a problem?
With technology always increasing I don't think there will ever be a way to make an undetectable counterfit, but who knows, I hope are hobby never gets to the point where we cant even trust that 3rd party graded coins are geniuine.
The day could come when counterfeiting will destroy the value of coinage. The reason the US government has changed the design of the paper bills recently is, by and large, due to counterfeiting, especially by entities outside of the country. The old $100 bill had been very successfully duplicated by somebody likely in the middle east and was printed in such large numbers and distributed so widely that the validity of the real bill was threatened. If the time comes when bills and coins can be successfully counterfeited, then we could see the end of currency and coinage and all financial transactions will be done electronically. This has already been envisioned.
Yes but if all transactions become electronical, don't you think some computer wize out there will find a way to hack into the system and just type in some numbers and triple the amount of money he has? There are faults with both ideas.
For monetary transactions, this may be true. However, when the government devises anti-counterfeit technology for its circulating currency, its intention is to make a counterfeit easily recognizable. In other words, when a $20 bill changes hands, the most analysis anyone will likely do on that bill is perhaps hold it up to the light to check the watermark and security strip. And that will only happen maybe 2% of the time. The challenge for preventing circulating counterfeits is to make counterfeit currency easily recognizable. For collectable coinage and currency, the bar is much higher for a counterfeiter. PCGS will spend several minutes (if not hours for highly valued coins) going over every micron of that coin to look for subtle signs of alteration or fabrication. This makes counterfeiting rare coins much more difficult (and is probably why many of the counterfeits we're seeing these days are trade dollars, which are just below the threshold of a coin people may get slabbed). Ultimately, a counterfeiter will only spend the time and effort required to counterfeit if it will make him money.
Counterfeiting has been a problem as long as coins have been in use. And even once they are no longer in use for commerce - they will still be a problem for collectors. It seems you think that recent advances in technology have given counterfeiters an edge to produce undetectable counterfeits. Nothing could be farther from the truth. There have been undetectable counterfeits for centuries. Yes even today. For example, it was only recently discovered that all of the major grading companies, including PCGS & NGC, had been grading and authenticating counterfeit micro O variety Morgan dollars. And these counterfeits were produced more than 100 years ago. The counterfeits were so good that they fooled all the experts, even the best we have today, for the past 100 years. This century long deception was not discovered because of technological advances. It was discovered quite by accident by a coin grader with a good eye. Actually it was discovered about 10 yrs ago - but there was not enough evidence at the time to make definitive statements regarding these coins back then. Today there is. I have little doubt that there will be other discoveries made along these lines in the years to come.
In the war business they keep making better weapons, which beget better defenses, which beget better weapons, which . . . In the money business they keep making better counterfeits, which beget better manufacturing techniques, which beget better counterfeiting techniques, which . . . And so the world goes.
Maybe so but it is also easier to get caught due to logs and tracing capabilities. There will always be somebody who thinks it is easier to get around the system than it is to earn an honest buck but with electronic systems, it is getting much more difficult to do without leaving a trace of yourself. I hope we never get to the point where we have to rely on a completely electronic monetary system but I can see the potential for it.
I agree I don't think we could ever depend on electronic transactions alone. But if we do It may kill our hobby.
I think that the situation with coins is not going to change. The technology to make a “perfect” counterfeit has always been out there, if someone wanted to take the time to get and use it. The technology for coins has not changed significantly. Paper money is another story, but that is why they redesign it periodically. Still, I think MOST fakes can be identified with enough effort. There is that case of an old BOP press being used in North Korea or the Middle East to make near perfect fake $100 bills. Also, consider that many countries outsource their paper money printing to private companies. This means that the technology already exists in private hands.
A cashless society killing numismatics? Well personally having never collected from change i'd beg to differ. I think there will still be lots of coin collectors out there, just like there are model collectors, book collectors, antique collectors, they never got them in change either.
< There is that case of an old BOP press being used in North Korea or the Middle East to make near perfect fake $100 bills. > That was Iran. It wasn't an old press though. It was a modern press of the same model we were using to print our currency. We sold it to them while the Shah was still in power.
We in the West sometimes get ahead of ourselves. A cashless society isn't in our near future. There are still places in the world where barter is quite common. Even in countries we would consider above that sort of thing. I've been there and seen it. Even in the United States, cash is still a primary means of the performance of the act of commerce. Go to a poorer part of town, and you'll see it. And as for counterfeiting, as others have noted, we'll always have it, and always will. But at the moment, US money is secure. The Secret Service is aggressive at find scofflaws, and circulating coins aren't valuable enough to counterfeit in large numbers. I think I read somewhere that less than 5% of the US currency circulating worldwide is believed to be counterfeit, and that includes third-world countries where you might expect counterfeiting.
