The second five cent piece with the term "nickel" attached to it was the Liberty Head Nickel, or the "V Nickel" as many would call it. First appearing on January 30, 1883, the coin was designed by Charles E. Barber. Barber would also design several other United States coins of other denominations, with similar features.
The coin's obverse depicts Lady Liberty facing left, surrounded by thirteen stars. Liberty is wearing a small crown, imprinted with her namesake. The year appears at the bottom, just below her neck. The reverse of the coin displays a large "V", Roman numeric for the number 5. The "V" is tightly surrounded by a wreath, and has "E PLURIBUS UNUM" directly above it. "UNITED STATES OF AMERICA" arcs along the top.
The original reverse design would prove to be a tremendous catastrophe, as the designer neglected to include the word "CENTS" on the coin. You might think this is just a simple oversight, but there was a fairly big caveat to consider.
The new nickel just happened to look a lot like the United States $5 gold piece of the period. The two coins were the same size and sported very similar features. Since these coins were still very new to the public, many people were still a bit unfamiliar with their look.
The most distinguishable characteristic between the two denominations was the color; the five cent piece was silver in color, and the five dollar piece was gold. What's an evil simplistic counterfeiter to do?
Gold-plate the new nickels, and pass them off as $5 pieces.
Since the new nickel lacked any statement of denomination beyond the "V" on the reverse, the coin could be interpreted as either five cents, or five dollars. Gold-plating the coins tilted the recognition in favor of the latter. This simple act inflated the percieved value of the coin to 100 times its original value, and merchants happily accepted these faked pieces, not realizing the coins were really just five cent pieces. These gold-plated nickels became known as "racketeer nickels".
After close to five and a half million of the "No CENTS" Liberty nickels were minted, Barber changed the design to include the word "CENTS" at the bottom of the reverse.
The final design lasted until 1913.
United States Coinage