RFID tags are destined to replace bar codes, but currently cost about $0.40 each—in order to be viable, the price must decrease by an order of magnitude. Researchers in Belgium have developed an organic diode made of plastic that could replace the more expensive silicon currently used in fabricating the tags, thus bringing the cost down (reg.) to acceptable levels.

Passive RFID tags are tiny (0.4mm x 0.4mm) and can be embedded almost anywhere, even in money. They contain circuitry to broadcast an ID code, but have no way of powering themselves. The power comes from an external source which transmits a signal with enough strength to induce a current in the RFID tag, thus powering the RFID transmitter. Think of those anti-theft devices you see in stores, and you get the picture.

Look for RFID tags to be replacing bar codes over the next decade or so. Wal-Mart has already mandated that their suppliers put RFID tags on shipments—but this is at the carton/pallet level and not for individual items. The reason for this shift to RFID is convenience. With tags on individual items, it will be possible to ring up your entire grocery order at once, without taking anything out of the cart. Also, shipping companies such as UPS could dispense with inefficient bar-code scanners and have near-100% performance in tracking packages.

Privacy advocates have raised concerns about living in a world where anyone with an RFID transmitter can learn private information about other people based on their RFID tags (for example, a driver’s license, the amount of cash being carried, or the number and type of credit cards). This is somewhat ameliorated by the fact that passive RFID tags have a short transmission range, but it’s a problem because one can energize and read an RFID tag without the tag-holder’s knowledge. In addition, tags can be reverse-engineered and duplicated, allowing thieves to access personal accounts for such things as the Exxon Speedpass program. Currently there is little security in the passive tags, mainly because the circuitry can’t be very complex and still meet price requirements.