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The hobo nickel is a sculptural art form involving the creative modification of small-denomination coins, essentially resulting in miniature portraits carved on coins. The nickel, because of its size, thickness, and relative softness, was a favored coin for this purpose.
Because this was relatively cheap art to make and because those who were good at it good make a pretty penny (no pun intended), this medium was particularly popular among hobos, hence the name!
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