The practice of awarding gold, silver and bronze medals at the Olympic games started at the 1904 Olympics in St Louis, USA. In the 1900 Olympics, the winners got trophies, and in the inaugural Olympics of the modern era, the 1896 games in Athens, winners got an olive branch and a silver medal and the runners up got a laurel branch and a bronze medal. (In the ancient Olympic games which ran for about 400 years, the prize was wreath made of olive and laurel leaves (and only the winner got it, the runners up got nothing).
Because it’s too expensive to provide medals made of solid gold, the gold medal is made of 550 grams of silver, plated with 6 grams of pure gold (it’s up to each country how they use the gold – Beijing for example has a two tone effect on the front of their medal by using 9 karat gold combined with 22 karat gold, others use 14 karat gold throughout). The silver medal is just made of the 550 grams of silver, with no plating, and the bronze medal is made of 550 grams of copper (with some tin and zinc to make it into bronze).
Because of their rarity, Olympic gold medals are worth way more than the actual value of the metal. For example, Polish olympian Otylia Jedrzejczak auctioned off her Athens gold medal for charity and raised $82,599.
Of course every single host of the Olympic games strives to ensure that the design on the medal is a work of art.
On one side of the medal it always features Nike, goddess of victory standing in front of the Panathinaiko Stadium (the marble stadium in Athens that hosted the first ever modern Olympic games in 1896).
The other side is unique to the city hosting the games. The 2012 London Olympics had an abstract design of the river Thames and all it’s tributories, with “2012” in the middle. The 2008 Beijing Olympics had a traditional bi disc (a flat disc made of jade, with a hole in the middle), with the Beijing Olympics logo in the center.
The 2004 Athens Olympics medal had a line of poetry by Pindar, taken from a poem he wrote in the 5th century BC for an Olympic winner from the ancient Olympics. It says “Mater O chrusostephanon aethlon, Olympia despoin’ aletheias” which means “O mother of gold-crowned contests, Olympia, queen of truth”. The Athens Olympic games logo (the flame) was in the middle.
The 2000 Sydney Olympics medal had an image of the Sydney opera house with an image of the Sydney Olympics logo (the flame) on the right.