Coin Clipping

Coin clipping was the practice of shaving small amounts of precious metal from the edges of circulating coins and passing the lightened coins at face value. Practiced wherever gold and silver coins circulated, it degraded England's silver coinage so badly that the Great Recoinage of 1696 replaced the stock wholesale and milled edges were adopted to make tampering visible.

Why it matters

Coin clipping is the retail version of a problem that defined metallic money for two millennia: the face value of a coin and the metal inside it can quietly diverge. Sovereigns did the same thing at scale by reminting coins with less metal, and the public responded exactly as Gresham's law predicts, hoarding full-weight coins and spending clipped ones. The episode shows that physical money is only as sound as the cost of verifying it, and verification was expensive for ordinary people.

In the gold vs bitcoin debate

Clipping exposes gold's oldest weakness: assaying weight and purity is costly, so trust migrated to mints, stamps, and eventually banks. Bitcoin cannot be clipped. Every unit is verified by every full node at essentially zero cost, and no participant can pass off 0.9 bitcoin as 1. Advocates count this as digital money's decisive advance over metal; gold partisans respond that modern assay tools and tamper-evident packaging have made physical verification far cheaper than in 1696.