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<p>[QUOTE=&quot;halfcent1793, post: 8187931, member: 86853&quot;]A market-oriented grading system was popularized by the Professional Coin Grading Service (PCGS). It was founded by seven coin dealers in early 1986 with the claim that it would provide “<b>THE ULTIMATE SOLUTION TO THE GRADING PROBLEM!</b>” [the caps and exclamation point are theirs] and “the most important market development in numismatic history.” That’s a lot of hype to live up to. Coins would be graded “by an industry-accepted grading standard.” The coin and its grade would be encapsulated in plastic, so the grade would stay with the coin forever. PCGS’ early success led to the establishment of many other TPGs, of which Numismatic Guaranty Corporation (NGC) has been the most successful.</p><p><br /></p><p>What was that “industry-accepted” standard? Initially, they didn’t say, but PCGS introduced what they called “precision grading,” in which the coin would be graded by three independent experts, each capable of accurately grading a coin 85% of the time. They claimed that this would give “in the neighborhood of 99%” accuracy. However, statistically speaking, three independent opinions, each with 85% accuracy should agree on the correct grade only about 60% of the time (0.85 x 0.85 x 0.85 = 0.614). Therefore, if the three came to 99% agreement, they must not have been working independently. Apparently realizing this, PCGS called their grade “AN EXPERT CONSENSUS GRADE!” [again, their caps and exclamation point].</p><p><br /></p><p>From an article I wrote for Penny-Wise in 2018.[/QUOTE]</p><p><br /></p>

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