Why Is a Dime Smaller than a Penny?
The answer is that in the early days of coins, silver was used in making dimes and other high-value coins. Each coin had a certain value, depending on the amount of precious metal it contained. A dime, for instance, contained exactly ten cents’ worth of silver.
Thus, a silver dime was ten times more valuable than a larger penny made from less valuable copper. Today, coins are made from fewer precious metals, and their face value is greater than the value of the metal they contain.
But most coins are still minted in the old sizes most familiar to us. Today the size relationship between United States coins still exists but for reasons of tradition only.
Also, none of the current coins are legal tender and no one is obligated to accept them as money. Money’s definition has changed radically over the years and now only paper money in the form of Federal Reserve Notes is considered legal tender.