History
While Civil War soldiers often carried coins from home with them to battle, it is generally believed challenge coins originated during World War I when a Marine, believed by the French to be a saboteur, escaped execution by proving his identity with his unit's coin
Features
Each group or unit's challenge coin bears mottos and symbols that reflect the heritage and identity of the group.
Identification
Each group's challenge coin is unique, but they are usually small coins or medallions minted in precious or semi-precious metal. They are not legal tender.
Traditions
Military tradition states that a "coin check" can be conducted anywhere at anytime. A person who cannot produce his coin must pay a penalty, which is usually buying the next round of drinks. If everyone produces his coin, then the challenger is required to buy.
Significance
Challenge coins are revered by all the military branches as an important aspect of their tradition and are a source of pride and identity for the bearers. The military also uses them as rewards or awards.