Challenge Coins

Challenge coins are steeped in history, and anyone who is anyone in the military—or at least in the Navy—seems to have at least one if they've been in long enough.

From the Wikipedia article on them:

According to one story, challenge coins originated during World War I. Before the entry of the United States into the war in 1917 American volunteers from all parts of the country filled the newly formed flying squadrons of the Army and Naval Air Service. Some were wealthy scions attending colleges such as Yale and Harvard who quit in mid-term to join the war.

In one squadron, a wealthy lieutenant ordered medallions struck in solid bronze and presented them to his unit. One young pilot placed the medallion in a small leather pouch that he wore about his neck. Shortly after acquiring the medallion, the pilot's aircraft was severely damaged by ground fire. He was forced to land behind enemy lines and was immediately captured by a German patrol. In order to discourage his escape, the Germans took all of his personal identification except for the small leather pouch around his neck. In the meantime, he was taken to a small French town near the front. Taking advantage of a bombardment that night, he escaped. However, he was without personal identification.

He succeeded in avoiding German patrols by donning civilian attire and reached the front lines. With great difficulty, he crossed no-man's land. Eventually, he stumbled onto a French outpost. Saboteurs had plagued the French in the sector. They sometimes masqueraded as civilians and wore civilian clothes. Not recognizing the young pilot's American accent, the French thought him to be a saboteur and made ready to execute him. He had no identification to prove his allegiance, but he did have his leather pouch containing the medallion. He showed the medallion to his would-be executioners and one of his French captors recognized the squadron insignia on the medallion. They delayed his execution long enough for him to confirm his identity. Instead of shooting him they gave him a bottle of wine.

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