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At the most general level, a coin's grade is determined by how worn it is. Various numismatic agencies have gotten together and agreed on a specific set of "wear indicators" for each type of coin that can be used to determine where it falls on the grading scale. One example is the amount of the buffalo's horn that's still visible on an Indian Head nickel - none, half, full, etc.

At lower levels, say G up to XF, those criteria are about all you need. When you get into uncirculated and proof coins, things become a lot more specific (or picky, if you wish!) The grading committees look at things like how sharp the image is, whether there are any scratches from having been bagged at the mint, and other minute details.

Go to your local library and see if they have a copy of James Ruddy's Photograde book. It's considered to be one of the best general references, with pictures of many coins in different states of wear and how that relates to their grades.

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17y ago

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