This coin was purchased on eBay in mid 2016 and the seller disclosed that it was fake and to be used in magic tricks.  We purchased it as a study piece and challenged the seller after we had it in hand about ethics.

True to form the seller's defense was "It isn't illegal to make and sell coins that are no longer in circulation."  An interesting defense and when we told him we were thinking about turning him in to the Secret Service he disappeared for a while.  But like most crooks he came back after a little nap time.

The coin is probably a steel alloy of some description.  It is light and responds to a magnet.  Also like some others we have seen it does not hold detail well, perhaps indicating it is too hard to easily strike.

When we looked at the coin we knew it was a fake because the reverse is from a different year.  The 1881-O has only one style of mint mark and it is oval.  The mint mark on this coins is round.

On VAMworld someone suggested that this might be a sand cast which we had not considered.  But this has some credibility for an unusual error that would not be present in a steel die.

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At first we thought we were seeing horns on Liberty's head and then we internalized the sand cast comment.  If the coin were cast in this way then it might have been made on a reused sand cast where a Peace Dollar was first produced.  Liberty has rays that come from the head that would just about line up with these and perhaps that is the source.

There is another blaring error in the headband where the word LIBERTY fades out toward the bottom right.