Aug. 29, 2008

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Invented in 1969, but only now becoming commercially and technologically viable, RFID technology is growing by leaps and bounds. RFID tags will soon be built into everything, allowing each individual item to be tracked and traced. The implications are startling.

Technology summary

RFID tags are microchips, so tiny that they can be embedded in almost anything to give it a unique ID code. An RFID tag acts as a transponder, responding to queries from a nearby transceiver by transmitting back its own unique 64-bit or 128-bit identifier. This yields about 18 thousand trillion possible values, each virtually impossible to erase without destroying the tag.

Some RFID tags are powered by batteries – but that makes them more bulky and expensive, limiting their applications. The most common RFID tags are passive circuits, powered directly by the received radio signal.

RFID chips cost about 50 cents each, but prices are dropping as quantities increase. Once they get to 5 cents each, it will be cost-efficient to put RFID tags in almost anything that costs more than about a dollar.

RFID tags are designed to be read between a few inches and several feet away, depending on the size of the antenna and the power driving the tags. Building more sensitive RFID receivers can increase that distance. During the early stages of adoption, RFID receivers cost as much as several thousand dollars each. Today, prices are as low as a few hundred dollars apiece.

The rapid spread of RFID

Bar codes have been with us so long, and they're so ubiquitous, that it’s hard to remember that they're a relatively new technology that took a while to catch on. The patent for bar codes was issued in 1952. It took twenty years before a standard for bar codes was approved, but they still didn't catch on. Ten years later, only 15,000 suppliers were using bar codes. That changed in 1984. By 1987 – only three years later – 75,000 suppliers were using bar codes. The company that caused the change was Wal-Mart, the world’s largest retailer, who simply “required” all their suppliers to use bar codes.

Now, Wal-Mart is expected to cause a similar surge in the growth rate for RFID tags. The company is already starting to install “smart shelves", with networked RFID readers. Gillette, the razor blades people, announced recently that they would buy 500 million RFID tags, to ship with each package.

RFID Applications

Within a relatively short timeframe, everything priced more than about $1 will carry an RFID tag. Washable RFID tags are available to be sewn into clothing. And banks are considering embedding RFID tags into banknotes, to virtually eliminate counterfeiting – it’s easy to check that the RFID matches the printed serial number.

The use of tagged gambling chips illustrates the benefits – and problems – associated with large-scale use of RFID. Counterfeit gambling chips have long been a problem for casinos, and they usually mark their chips with inks visible only in infrared or ultraviolet light. Embedded RFID tags make the chips much harder to counterfeit, and placing tag readers at staff exits could cut down on theft by employees.

Tagged chips also help casinos manage large-scale theft. If a large stash of chips goes missing, after a table is overturned during an argument, for example, casinos sometimes have to change their entire stock. This is unpopular with gamblers, since any chips that they have not cashed become worthless. RFID tags would allow the casinos to identify stolen chips without the expensive process of restocking.

The new generation of casino chips is giving insights into the way banks and shops could keep track of real money if it was tagged. Casino operators routinely monitor gamblers with security cameras, just as retailers monitor stores for shoplifters. Aside from improving security, RFID-tagged casino chips could also be used to track how people play. Casino operators can keep tabs on the fortunes of every gambler on their premises, recording the stakes placed by each player along with their winnings and losses.

The casinos want to check that big winners are not cheating the house, and to identify lucrative "high rollers" and encourage them to keep playing by treating them to free meals, show tickets, or hotel rooms. But this monitoring has to be done by human observers and is haphazard and unreliable. Chip tracking could dramatically improve the process.

RFID Implications

Widespread use of RFID tags raises the possibility of people being tracked though personal possessions. The implications are startling – purchases can be linked to the credit cards that were used to make specific purchases, which allows links to specific advertising based on personal spending patterns. The scenarios are similar to the movie “Minority Report”, where police surveillance can track individuals any time, anywhere.

RFID tags can be inserted into banknotes to combat fraud and money laundering – a significant advantage. But also, this raises the possibility that anybody with an RFID reader could count the money in wallets of passers by. Do the benefits outweigh the loss of privacy?

Unlike bar codes, which are passive printed codes, RFID tags remain active after the customer leaves the store. The RFID industry is currently giving mixed signals about whether the tags will be disabled or left enabled by default. Leaving the tags enabled poses a serious privacy threat, and this is raising alarms.

Peculiar government and legal scenarios can be imagined – people subpoenaing RFID logs to prove that someone was in a certain location at a certain time. Future burglars could canvass alleys with RFID detectors, looking for RFID tags on discarded packaging that indicate expensive electronic gear is nearby. The government could keep track of how and where you spend your money.

In all of these scenarios, personal privacy is seriously eroded. George Orwell’s 1984 did not arrive in 1984. It just may be a little late….