A military coin is given to soldiers as identification or proof of their memberships in a certain class or squad. The tradition of military challenge coin dates back to the First World War where soldiers would challenge another soldier to show his coin. If the challenged should be bringing his coin with him and show it or he’ll need to buy the challenger a drink. If he is bringing his coin, then he gets a free drink from the challenger.

Today, the use of challenge coins is no longer limited to military use. Some organizations now also issue challenge coins to their members not only as a sign of membership but also to boost the morale of their members.