Melting Coins?

[Troutner]

I ran across this topic on the forum concerning the hording and melting down of US coins in the future:

https://bitcointalk.org/index.php?topic=128502.40

Does anyone have experience with actual melting of coins? If someone was to horde physical coins with the expectation of trading them in for their base value in the future, how would one go about it? Who would buy the base metal?

Chris

[Otoh]

Anytime that the metal content of issued coins becomes greater than their face value then ppl take them out of circulation for their melt value, it's happened many times, usually for PMs like gold & silver where there is np reselling, if it has ever happened with say copper coins I'm not sure but in times of wars etc copper becomes too much in demand for use in coins often, scrap dealers/recyclers buy any metal with market value at spot price minus their commission np. Many gold & silver coins are sold for solely their melt value, sometimes less & can always be resold as is or refined in to ingots say if it's worth doing.

[Stephen Gornick]

Does anyone have experience with actual melting of coins? If someone was to horde physical coins with the expectation of trading them in for their base value in the future, how would one go about it? Who would buy the base metal?

There's a bitcoiner learning the ropes right now.  Here's a video of him creating an ingot from melted jewelry and other scrap:
 - http://www.youtube.com/watch?v=YKak7tPxd2M#t=1109s
 - http://bitcointalk.org/index.php?topic=133022.0

There's a little backstory there to be sure.

But that shows the amount of effort to convert silver items to silver usable for trading and why physical silver is sold above spot market rate.

[ThaddeusB]

Technically, it is illegal to melt U.S. coins.  Other countries have similar laws I'd imagine.

[greyhawk]

Technically, it is illegal to melt U.S. coins.  Other countries have similar laws I'd imagine.

It's illegal to melt US currency. The OP is planning to hoard pennies and nickels until they're phased out as currency, THEN melt them down.

[william]

I've thought about doing this before and it didn't seem worth the effort. Hopefully, someone can prove me wrong.

[klondike_bar]

id imagine the process of melting [lets say] pennies would require cleaning the surface of oxidation, dirt, greases, etc and doing this would incur additional cost.

LETS PRETEND (i dont know exact numbers):

penny is actually worth 1.5 cents of raw metal
costs 0.1-0.2 cents per coin to properly clean the material
costs 0.2 cents per coin to heat to melting temperature
takes TIME to clean and smelt the coins, lets say for a single "batch" its 1hr cleaning and 1hr smelting). Additional time to sort coins and remove debris

At this point, it would profit about 0.1-0.2 cents per coin, and at least 2hrs to clean and melt the coins down to a metal bar. Assuming you want to make $50 an hour, you would need to work with 35000 coins

This doesnt include the effort and time needed to obtain the coins and supplies, sell the end materials, and also the initial up-front equipment (probably $1000 for a decent smelter). I personally dont see the profit in it.