book cover Introduction
Preface
Glossary
The Grading Process
How To Grade Mint State Coins
Surface Preservation
Strike
Lustre
Eye-Appeal

Home

Determining Grade
Is It Proof Or Business Strike?
Prooflike Coins
Grading Other Series
Why Won't They Grade My Coin?
High End vs. Low End; The Bust-Out Game
Computer Grading
Conclusion
About the Author

Computer Grading

And what does the future have in store for the grading of coins? Will coins ever be processed through a grading center on a long conveyer belt, subjected to laser inspection, fingerprinted by image analysis, and sealed in a tamper-proof case, all without human intervention?

What will happen to my "wonder toned" coin? Can a computer objectively state that one coin is superior to another based on color? Who said one color is more eye appealing than another? Is this just another way to de-humanize the collector?

These are all common questions asked on the bourse floor whenever the subject of computer grading is discussed. All are legitimate questions that need answers. But before we address these questions, let's first look at what's currently going on in the marketplace.

On May 16,1990 PCGS announced a major breakthrough in a computerized system that grades coins. The system, PCGS Expert, utilizes robotics, image enhancement, image processing and an online image database for its integrated computer system. The system will perform four primary functions:

1. automated computer grading of coins
2. computer aided grading
3. image archiving
4. digital fingerprinting

I. The most important aspect of the system is the automated computer grading. According to PCGS, the Expert goes through a nine step process before a final grade is assigned to a coin. These steps are:

1. Multiple images of the coin under various lighting conditions are captured in digital form using a high resolution camera.

2. All or various portions of the captured images are computer enhanced to bring out important features of the coin.

3. The key regions of the coin are examined in great detail to identify, classify, measure, and score all flaws.

4. Secondary regions of the coin are examined to identify flaws that exist in busy background regions such as hair, letters, and rim. These flaws are then classified, measured and scored.

5. A light flow and reflectance analysis is used to precisely measure the mirror as well as the inherent lustre of the coin.

6. Key areas of the coin are examined to measure the strength of the strike including the hair.

7. Thousands of parameters are generated from the various analyses and these are then synthesized into the key components of the coin including obverse and reverse marks, strike, lustre, eye appeal, mirror, toning, and exceptional conditions.

8. The results are combined using a large set of "expert rules" to establish the final grade.

The process by which PCGS grades has been well thought out, but there will be a need to compare the finished product with the one that is already there. There will be some worry that there may be one trading level for computer graded coins and another for coins already graded.

Initially, PCGS grades Morgan Dollars by computer and will first concentrate on developing computer grading for coins with high submission volumes such as $20 Saint-Gaudens, Walking Liberty Halves, and Proof Franklins.

Here are the other aspects of the computer grading which might become just as important:

2. Computer aided grading will be used in special circumstances to aid the human graders in making a final determination of the grade of the coin.

3. Image archiving will store one or more images of the coin for future reference. This storage method will aid the development of computer grading of coins with smaller populations.

4. Digital fingerprinting will provide additional support in the determination of the authenticity of a coin and will aid in the determining if a coin has been tampered with. It will also be a useful tool for positively identifying coins for the title disputes and other purposes.

An important aspect of their announcement was that PCGS will, for now, utilize a human verifier on all coins graded by the Expert system.

Several other companies are also involved in the development of computer grading. They include such diverse groups as Amos Press (Coin World), and CompuGrade, a New Orleans-based numismatic research and development entity. All of the current grading services besides PCGS have expressed interest in computer-grading, but so far no other system has been developed.

Now let's answer some of the questions that we originally discussed.

On the positive side, computer grading systems can be highly consistent, often achieving rates as high as 90%. This is more accurate than any single human grader. By using digital fingerprinting, the service can keep records on all of the coins that they have graded. A "grading set" containing several hundred examples is far superior to that of one that contains one or two examples.

The computer grading systems can also be quite cost effective. The human resources that are currently used to grade coins are expensive, and are subject to time limitations in the amount of work they can do in a day. A technician can operate a computer for long periods of time, enabling turn-around time and cost to come down. (Whether or not the services pass along these savings to the consumer depends on the extent of competition in the marketplace).

Now for the negative: Do we really need to have such sophistication for what is essentially a hobby? A lot of people scoffed at David Hall when he first introduced PCGS. But look how far we have come in the last four years. Grading has finally become better defined, and people have taken a stand behind their grades. Computer grading is a natural evolution in the grading process. Its acceptance in the marketplace will be determined by the consumer. If it is able to grade at high degrees of consistency, and at the same time reduce costs to the consumer, then it will be a welcomed addition. If not, it won't be accepted at all.

Can a coin's eye appeal be judged by a computer? At this time the answer is no. This is truly a subjective analysis, that may be resolved with time.

Should we accept computer grading as an integral part of numismatics? The answer is a qualified yes. The fact is that we couldn't stop progress even if we wanted to. So, use the computer wisely, but realize that right now it works best along side human beings.



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