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you should polish the head of the hammer to mirror, it will make the pinning job look nice.

4 oz ball peen hammer, or you can try a spoon but with that it will take a lot of taps.
You need a flat smooth surface on which to peen, usually a small anvil or a block of steel is used.

You can visit antique malls/garage sales/ gun shows and look for vintage blades at good prices.
Ebay can be tricky because of bad images, or if you have no experience with what to look for.
You...