Automated Rare Coin Grader
This project will undertake the development of a system that will be used to grade,
appraise and authenticate valuable collectibles items such as rare coins using advanced scanning,
weight measurement and data mining technology. The initial plan is to design the system for processing
rare coins and then to expand the usage scope to other valuable collectibles such as postage stamps,
cards and possibly antiques.
A user will be able place a coin on a special scanner/scale at which time a high-resolution scan
of the coin will be made and the weight in grams will be recorded. After the scan is completed
the system will then:
Rationale / Justification:
Rare coins are presently graded by human hand and eye inspection that often produces varied,
inconsistent and sometimes dubious results. For instance one grader may assign a grade of Very Good
to a particular rare coin and another grader may assign a grade of Fine to the same coin.
On many rare coins a difference of a single grade can often mean thousands of dollars in difference
in the value of the asset. Some times these discrepancies in grades are simply errors by the graders
due to poor training, poor lighting, fatigue or misinformation.
But many times the discrepancies can be attributed to dealers under-grading items so that
they can purchase them for an amount that is cheaper than what they are worth or over-grading them
so that they can sell the items for more than they are worth.
- Make a determination to see if the coin is a counterfeit or if the coin has been altered by comparing the image to a database of known fakes.
- Compare the scanned visual image to a large graphical database to determine the type, denomination, date and an accurate grade of the coin.
- Cross-reference the information obtained and compare it against a database of market values to assign an appropriate asset value. Obtaining a proper asset value is extremely important for securing proper insurance as well as knowing what price should be charged in asset disposition.
With our proposed system grading will always be consistent since no human error factors or
financial incentive can be introduced into the grading process.
Our system will simply read the asset by scanning and weighing to produce an automated comprehensive
assessment, which includes authentication and valuation.
The market need for fair, consistent, accurate and unbiased grading / appraisals of rare collectibles
encompasses each major category of collectibles. Initially our system will be developed for the rare coin
segment of collecting as abuses in grading / appraisals are widespread and revenue opportunity is large.
The Computerized/Automated Grader will have application in two potential revenue generating
market capacities: As a commercial product and as a commercial service.
Development Strategies: We will build a brand that becomes
widely recognized by the experts and will set a new standard
for how rare collectibles are graded and appraised
by eliminating the human element.
We will devote considerable resources into promoting the value
of our system and why our system is the only one that sense.
We will attempt to secure patents on our products and services
as soon as the prototype is developed.
- Product Opportunities: A proprietary package that includes hardware, software and
supplies will be developed so that it will be licensed via leasing to major coin dealers and grading services.
Revenue will be obtained from the base monthly lease, the interest on the lease and a per item charge
for each scan. Dealers will benefit in two major ways from having our system:
- A dealer that posses one of our Automated Grading Systems will receive leads from our company and will have credibility in their transactions.
- Dealers will be able to grade their coins immediately instead of incurring the time delay, risk and expense of mailing their coins to a third party grading service.
- Service Opportunities: We plan have our product represented at every major coin show
in the United States for the purposes of providing grading for a fee right on the spot.
Many thousands of coins are bought and sold at the major shows, our service which will provide
grading in the cost range of $3 to $5 per coin will be so convenient and cost justified that both buyers
and sellers will want to take advantage of our service. Our grading service will also be made available
to auction houses, probate attorneys and insurance companies of which substantial amount
of revenue opportunities exist.
Consumer Appeal: Accurate grading of rare coins and collectibles 100% of the time,
consistent grades / appraisals every time no matter how many times a user resubmits a coin for regrading.
- Grading Services: The major competition for the grading of coins
is the Major Grading Services.
In the mid 1980's a number of for profit Grading Services came into being.
Their mission & intention was to start certifying rare coins
by having experts (humans) grade them
so that rare coins could be traded 'sight unseen' by collectors.
Since then a large number of certified coins are traded on a regular basis
in this format.
Certified coins are encased in special plastic holders with appropriate
labeling to identify the type and grade.
Some of the grading services have good reputations for being reasonably
accurate and others have terrible track records.
Beside the issue of inconsistency the other drawbacks
that exist in using these services are: risk of loss, time delay, cost
and lost opportunities
as coins must be mailed to the grading services for submission.
- Coin Dealers: Many individual coin dealers,
which are usually small businesses,
very often do the majority of their business in raw coins.
Raw coins are those,
which have not been certified by a major grading service.
While there are many dealers, which are quite honest in their grading,
there are also many dishonest graders that yield undeserved profits
by over or under grading.
Many collectors complain of rampant over & under grading in raw coins.