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We know what you’re buying

Will a new batch of tiny wireless ID chips change the world? Paul Boutin explores the potential uses - and misues - of RFIDs.
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In September, Hitachi announced the release of a tiny wireless ID chip that can be “easily embedded in bank notes.” Rumors have swirled that the European Central Bank has been looking to embed such chips, called RFIDs, or Radio Frequency Identification Devices, into Europe’s paper money in another year or two. The ECB hopes the chips will thwart both counterfeiters and money launderers. So, what exactly are RFIDs, and how do they work?

In the simplest terms, RFID tags are radio devices that respond to a scanning unit’s signal when they’re brought near the scanner by transmitting back a digital code with a serial number that uniquely identifies the tag. The scanner is connected to a database in which the tag’s serial number can be used to look up exactly what (or who) it’s attached to. The smart card or keychain fob that lets you get into the office after hours by waving it at the door is an RFID, as is the tollbooth fast lane pass that lets you drive through the booth without stopping. Think of them as tiny wireless bar codes. The chips can be battery-powered, but many aren’t — they use the scanner’s radio beam as their power source when placed near it.

No battery means RFIDs can be much smaller than most digital gadgets and can be placed permanently in hard-to-reach places. The pet ID implanted under the skin of my cat’s neck is the size of a grain of rice, and it never needs replacing. Hitachi’s new chip, which carries its own built-in antenna, takes the technology down to a new level of tiny: At less than half a millimeter square, it’s about the size of a pepper flake. Yet the 128-bit ID number embedded in each Hitachi chip is big enough, in theory, to catalog every grain of sand on the world’s beaches and deserts, plus every star in the known universe, several times over. (In practice, some of those bits are taken up by the manufacturer’s information about the chip itself.)

Not surprisingly, manufacturers, wholesalers, and retailers are doing handsprings over RFID’s potential to remove inefficiency from their supply chains. Radio tags make it easy to track inventory as it goes out a loading-dock door, or gradually disappears from a supermarket shelf, without sending an employee around to hand-scan every item. Even boxes hidden behind other boxes can be scanned, allowing an entire shipping pallet to be tracked in one blip as a forklift takes it away. Misplaced items in a warehouse can be found by walking around with a scanner. (The readable distance on the tags varies from a few inches up to about 5 feet, less if there are other objects in the way; Hitachi’s new tags have a much shorter range, requiring close contact with the scanner.) More far-out uses for the tags are already in the works: Italian appliance-maker Merloni is working with Benetton on a washing machine that will read RFIDs woven into Benetton’s upmarket Sisley line of women’s clothing and set its washing instructions automatically-presumably warning you if you’ve tossed your red skirt in with a load of whites.

At less than 10 cents apiece in bulk, RFID tags are fast approaching a price point that makes them a viable replacement for bar code stickers. First, though, they’ll have to run the same gauntlet that UPC bar codes did: Privacy gurus and paranoids alike have already declared RFID the latest incarnation of Big Brother. Gillette’s attempts to use the tech to track its oft-stolen Mach 3 Turbo blades on store shelves ended in a PR fiasco, with consumer activists protesting outside a U.K. department store that had set up cameras to snap photos of customers who picked up packages of Gillette blades with RFID tags inside them. California state Sen. Debra Bowen held a hearing in August to investigate potential privacy issues with the chips, although she told reporters she’s not ready to introduce legislation.

It’s easy to dismiss end-timers who bray about the government embedding “human bar codes” in our necks as if we were housecats, but there are more plausible invasion-of-privacy scenarios that go something like this: I buy a pair of Prada pants with an RFID tag at Saks with my credit card, tying my name to that specific pair of pants. As I walk into other stores, restaurants, and maybe a concert, I’m scanned by marketers. They only mean to track the broad buying patterns of the Prada-wearing demographic, but the details of my pants’ travels end up in the hands of law enforcement officers. The feds decide I’m a potential terrorist because I happen to frequent the same nightclubs as another suspect, and I’m taken away without knowing why. The idea was completely laughable three years ago, but now I’m not so sure.

The problem is simple: RFIDs embedded in a product to track inventory are still active after a customer buys them, leaving the door open to track the customer instead. To solve the problem, the Auto-ID Center, an RFID research partnership of nearly 100 companies and five major universities, has suggested what seems like a blindingly obvious fix: Create a standard for RFIDs that includes a kill switch. Once the item is scanned at checkout, the tag is told to permanently disable itself. Anxious consumers could run a home scanner over their purchases to find and disable stray live tags. Of course, the euro’s guardians, who reportedly hope to tag bank notes by 2005, won’t want their chips to be so easily defeatable. In that case, the kind of people who need to worry about being busted for the cash in their pockets may fall back on the time-honored practice of dealing in U.S. dollars instead.

Paul Boutin is a Silicon Valley writer who spent 15 years as a software engineer and manager.