By now, we've all heard chilling tales of the dangers of RFID chips. We know that like any technology RFIDs can be hacked, abused, and exploited. But we also know RFIDs are used to perform many useful functions– from tracking inventories for large retailers to starting the engine on a new Toyota Prius. So how do we balance technological innovation with concerns over privacy and security?

      First, let's talk about how we got here. Annalee Newitz tells us in a recent article for Wired that RFID technology dates back to World War II when radio signals were used to differentiate between Allied and Axis aircraft. Over time, the technology lost its clunkiness and as a result started popping up everywhere. And that's when things started to get confusing.

      Newitz provides several examples of security gaps in RFID technology. One example particularly stood out in my mind as a real danger of the technology. After talking with an RFID researcher, Newitz learned that retail pricing systems that use RFID are vulnerable to potentially devestating acts of hacking. Armed with only a PDA, anyone bent on harming consumers, the store, or its suppliers could easily distort the prices in an entire store. The effects of this hacking go far beyond Joe Six-Pack paying a dollar extra for, say, a six-pack. Indeed, they would reach all corners of the globe, distorting the information on which our market system rests.

      But do not despair, technophiles. There remains a pretty strong argument that holds we just need time to sort things out:

"The world of RFID is like the Internet in its early stages," says Ari Juels, research manager at the high tech security firm RSA Labs. "Nobody thought about building security features into the Internet in advance, and now we're paying for it in viruses and other attacks. We're likely to see the same thing with RFIDs."

Daniel Corbett