When you think about it, money – the actual coins and notes we all carry, rather than the concept – is pretty weird. Our early ancestors had no need for it. They used to trade what they had for stuff they needed.
That $10 note in your pocket will take care of breakfast, but the actual cost of the synthetic material, dye and other components used to make the note itself wouldn’t even cover the tip. And what about our coins? Is there enough silver in a 50 cent piece to buy you a bag of lollies from the dairy? What about the trusty dollar coin?
If all the banks in the world crashed tomorrow, and we forgot about the arbitrary values that we assign to money, how much would a $1 coin really be worth?
As it turns out, the actual worth of a $1 coin doesn’t even come close to the value we place on it. Did you know that it doesn’t actually contain any gold at all? Instead, it’s made up of a mixture of 92 per cent copper, 6 per cent aluminium and 2 per cent nickel.
While the value of clean copper varies significantly based on global demand and the quality and condition of the copper, we can roughly estimate this metal to be worth about $6 per kilogram – and that’s being generous.
According to the Australian Royal Mint, the Australian $1 coin weighs exactly 9.00 grams. It also has a diameter of 25.00 mm and was designed by a man named Stuart Devlin, in case you were wondering. So, with only about 8.28 grams of the $1 coin being made up of copper, we estimate the total worth of the copper in a trusty $1 coin to be just under half a cent!
Things don’t get any better when we take a look at the aluminium and nickel included in a $1 coin either. We’ve done the calculations, and estimate the $1 coin contains around 4 cents worth of aluminium and about a quarter of a cent worth of nickel.
So, at the end of the day, how much is a $1 coin really worth? About 5 cents. You couldn’t even afford a lolly with that!
It didn’t always use to be this way. The original Australian 50 cent coin – minted in 1966 – was actually made up of metals that were more valuable than the denomination of the currency itself! The government quickly realised that was a bad idea, however, and took the coin out of circulation.
Today, it makes far more sense economically to make the majority of our coins out of cheap materials that can be mass produced, as opposed to something truly valuable. It also dissuades people from attempting to melt down coins, a practice that is actually illegal in Australia.
As we move into the future, the need for physical coins will be replaced altogether with digital currency accessed by credit cards, debit cards and smart phones.
Surely the plastic credit card would be cheaper to manufacture than 5 cents each, such as those available through Virgin Money.
How much do you think a $1 coin is really worth?