RFID, Coins and Currency
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Last night, one of the fictional cable shows talked about how our (US) currency gives off radio frequency information, and when in large quantities such as a ransom payment, it gives off much more information.
Remember, this was a FICTIONAL show. But, how close are we to having RFID (Radio Frequency Identification) embedded into our currency? It could happen.
This is an interesting commentary from RSA Laboratories on RFID in currency:
Will RFID tags be embedded in currency? If so, when?
Various media reports have suggested that there were plans in Europe to embed RFID tags in currency by 2005. It is the position of RSA Laboratories at this time that such a plan is highly unlikely in the next several years. Indeed, RFID tags do not seem likely to serve as a cost effective anti-counterfeiting measure at present. RFID tags might be used to help track currency. As explained in a scientific paper by RSA Laboratories, however, it is very difficult to provide tracking capabilities to law enforcement authorities without making those capabilities more generally available and thus jeopardizing privacy.
With a simple search via Google, several patent requests such as “Passive radio frequency identification system for identifying and tracking currency” and “Embedded RFID Verifiable Currency” can easily be found.
Plus, there’s significant discussion about tracking Euros, especially large denominations, with an RFID thread. From a technology perspective, here’s an article from 2003: Radio ID chips may track banknotes. Along that same vein, here’s a discussion of the RFID Euro on a collector’s web site: RFID Banknotes.
But, RFID information can also be attached to coins. Take a look at this 2007 article: Canadian coins bugged, U.S. security agency says. But as one gentleman in the article claims, “From a technology perspective, it makes no sense. To me it’s very strange. You give the guy something with a transmitter that he’s going to spend — I mean, he might have it for an hour.” He’s right, putting a transmitter on a coin for spy purposes does not make sense.
A search for “RFID” on the Bureau of Engraving and Printing web site shows information about how RFID might help the visually impaired. However, some think a better optical reader for the current currency would be more cost effective and easier to do.
For more interesting (and scary) information check out this 2004 summary document FTC Workshop on Radio Frequency Identification: Applications and Implications for Consumers from EPIC (Electronic Privacy Information Center) where they claim, “RFID should never be employed in a fashion to eliminate or reduce anonymity. For instance, RFID should not be incorporated into currency.” Then later in the document, they comment, “Money now poses a risk to privacy because governments are considering embedding RFID tags in currency.”
EPIC’s main web site’s RFID pages also provide more information along with more recent legislation proposed. Scrolling down their page, they include a discussion on how to protect your privacy with the increasing technology and “Big Brother is Watching” concerns. Plus, they have links to many other web sites about the use of RFID technology.
One more site, RFID: Radio Frequency Identification Technology and its impact on privacy, includes a discussion of RFID and lists a significant number of other web sites with details about the use of RFID technology, both helpful and a threat to our privacy.
Back to the origin of this post. The statements made in last night’s fictional show about RFID information in our currency appear to remain fiction, but they could become fact.
(On a side note, a couple of years ago, many of the technology sites suggested a hammer blow strategically placed was the best solution for the RFID chip in the new passports. In the one of the links above, an article discusses how the Dutch considered our e-Passport technology until they determined an individual’s passport information was easily copied and compromised from 20 feet away.)
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New $600 Requirement
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Have you heard about the new 1099 requirement for businesses that was hidden in the Health Care legislation?
In the past, businesses had to report payments to individuals, in lieu of W-2 forms, for services rendered in excess of $600 per year. Financial institutions, such as banks and stock brokerage firms, also used 1099 forms to report interest or dividends they paid to individuals during the taxable year.
Now, with this new law, businesses will have to report any payments over $600 for goods in addition to services. For example, this includes utility bills, telephone bills, office supplies and any other expenses that equate to $600 or more during the year.
You may have also heard on the news and in print that coin dealers are especially concerned about this new requirement. They frequently buy from and sell to many individuals and businesses throughout the year. The amounts per invididual or business frequently will be greater than $600 in the year to an individual or business.
Rather than belabor the point from the dealers’ perspective, let’s think about this from an individual collector and investor’s view.
To refresh your memory, this is what a 1099 looks like:
The gray arrows point to information about the payee. There must be a tax identification number. This can be a Social Security number or it can be a Tax Identification Number. Most individuals would only have a Social Security Number. In addition, the payee’s name and address must be on the form.
“What’s the big deal. This is the dealer’s problem not mine,” you’re thinking.
Are you sure?
What if you want to sell a coin or several coins? Maybe you want to upgrade your collection, cull out some of the lesser coins and use the funds to buy nicer specimens. Or, maybe you invested in gold or silver and want to translate some or all of it back into cash.
Anytime you sell any of your collection, the buyer (the dealer) will have to collect the information noted on the 1099 from you.
“Oh but, I’m only going to sell coins less than $600.”
But, how will the dealer know that you won’t sell him more at a later date within the same year for a total greater than $600? He doesn’t know. Therefore, he will need to maintain the paperwork for every purchase or face IRS penalties.
You’re still thinking, “OK, but this is still the dealer’s problem, not mine.”
Are you sure?
Anytime you provide your Social Security Number to someone, especially someone you don’t know or don’t know how trustworthy all of their employees are, you endanger your identity.
Identity theft causes many problems and takes significant time to correct.
This new requirement makes people vulnerable – especially numismatists and investors.
Criminals already focus on collectors with their various theft schemes. This new legislative reporting requirement gives these villains another avenue to explore and exploit for their nefarious plots.
The good news is that some legislators in both the House and the Senate are trying to repeal this requirement. However, they face stiff competition.
Several dealers are already discussing getting out of the business if this requirement is not repealed.
From a collector or investor’s view, you should let your representative and senator know that this requirement endangers your information and your hobby.
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Caution: Gold and Gold Buyers
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It looks like gold is on the way up.
Today’s end of New York trading showed the per troy ounce price was slightly down from the Friday close. Friday was $1227.50 and today’s last entry was $1221.40.
But, over the weekend, dealers began increasing their offers to buy proof gold at $2000 per ounce. Different from bullion and from standard issue gold coins, proof gold with its mirror finish and lustrous design adds a premium above bullion prices. Most interesting is that this dealer to dealer pricing began increasing due to the after market activity.
For the general public, these increases in prices – both bullion and proof - will yield an increase in the “we buy gold” advertisements – on TV, on the radio, on billboards, in newspapers, on the internet, and where they think they will get the most results from their advertising dollars.
If you want to sell gold, either coins, jewelry or other scrap gold, please be careful. Asking several different buyers what they are paying is a good idea. Just because someone tells you they are the high buyer does not make it so.
Rather than stand on the soapbox, take a look at this excellent article from earlier this year. The Examiner in Southeast Texas researched the buyers and detailed their findings in: Treasure hunters or gold diggers?
The article is rather long, but if you need or plan to sell gold (or silver) in the near future, the time reading will be well-spent.
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Dollar Bills & Computer Woes
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But, the computer woes belong to the government – the Department of the Treasury to be exact.
Today’s post was going to comment about the dollar bill. As such, a trip to the Bureau of Engraving and Printing web sites for a down-loadable picture of a bill was in order.
After several attempts to access their web sites, a simple search returned several articles about the Department of the Treasury’s sites being down. It seems their third party host’s cloud computing architecture was hacked and four of the Department of the Treasury’s sites had to be taken offline. These sites include: bep.gov, bep.treas.gov, moneyfactory.gov and moneyfactory.com.
The hacked code redirected visitors to a site in the Ukraine with many malware programs that could infect the visitors’ systems. Be on the lookout for system problems if you visited one of those Treasury sites yesterday or this morning before they were taken offline.
You can learn more about the issue at these sites:
U.S. Treasury Sites Hacked, Serves Up Malware
Treasury shuts down 4 cloud-hosted Web sites after infection
US government Web sites hacked
Investigations have traced other infections to this same Ukrainian site. They exploit weaknesses in common software such as Adobe Reader. Perhaps in the future when an alert for a new updated version arrives, we will be more apt to apply it quickly.
Frustrated, the gentleman in the first article leads off his commentary with, “As a consumer and a taxpayer, it’s assumed that government websites are the most secure in the nation. After all, if hackers can gain access and plant malware for viewers to download, then the nation really isn’t that all secure on the cyber frontier, right? Unfortunately, that’s apparently what has happened to three websites belonging to the U.S. Department of the Treasury. How safe and secure do you feel now?”
I can answer his question – “not safe at all.”
We as individuals, small businesses, corporations and governments depend heavily on our computers and the corresponding computing networks to go about our daily lives. And, computers do so many things that we don’t even think about anymore.
Our vehicles depend on computers. The power grid would quit operating without computers. Our telephone systems – landline and wireless – would cease to operate without computers. Our banking systems do most of their transactions via computers. And, the list goes on and on and on…
Even those of us whose formative years were prior to the prevalence of computers would have a difficult time adjusting to crippled systems or no computers at all. But, the younger folks who have always used computers would encounter a severe withdrawal without their systems.
It’s disturbing to be so dependent on a technology that can be attacked remotely from anywhere around the world.
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NEW! The Redesigned $100 Bill
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Kudos to the Bureau of Engraving and Printing. This morning the new Series 2009 $100 bill was unveiled in a ceremony with the Department of Treasury presenting the new bill in their Cash Room.
Take a look at the new Ben, isn’t he handsome!
There are several new security additions along with a slightly modified look for the bill. In particular, look at the blue 3-D strip to the right of Ben’s portrait. If you move the bill from side to side, the contents of the strip – 100 and a liberty bell – move up and down. If you tilt the bill up and down, the contents of the strip move from side to side. This information is embedded in the cotton linen blend of the note not just printed on the surface and is visible without any special devices being necessary.
In addition, they’ve added an inkwell to the right of the portrait that contains an image of the liberty bell. The bell changes color from copper to green when the bill is moved.
Plus, the Bureau of Engraving and Printing began adding “Symbols of Freedom” to all of the redesigned currency. For the $100, portions of the Declaration of Independence are printed to the right of the portrait and behind the quill pen and inkwell.
Adding to the shifting colors, the “100″ in the lower right corner can be green or copper depending on how you hold and view the note.
Like the earlier changes, you can see Ben’s portrait is larger with no constraining oval around his image. Plus, his shoulders flow into the bottom border of the bill.
From earlier security measures, the bill still contains the security thread to the left of Ben’s portrait. Back lit, you can see USA and 100 alternating along the security thread. This can be seen with regular light, however in ultraviolet light, the thread shows pink.
Also from earlier efforts, the watermark containing Ben’s portrait remains in the blank space to the right. The watermark is embedded when the cotton linen blend is made into sheets for the $100 bills prior to printing.
One of the additional elements in our currency is the rough and raised texture on our bills. For the new $100, the rough area to test is on Ben’s right shoulder (your left when facing the portrait). This printing is added by the enhanced intaglio printing process used for Ben’s portrait.
Very fine microprinting continues to be a deterrent for counterfeiters in several areas on the face of the bill. In particular, very small words can be found in Ben’s collar, along the new quill pen, in the area around the watermark and along the border of the bill. A magnifying glass or loupe can help you see these areas better.
As with the changes to the other currency, a pale blue background color has been added to the $100 bill. This color – more of a wash than a distinctive color – is more difficult for counterfeiters to copy. But, as they caution, the bill’s color should be only a minor security consideration when viewing the new bills. The other security measures are much stronger and more difficult to copy.
These new bills will be made in Washington, D.C. and in Fort Worth, TX. Instead of the mint mark like on coins, the new bills will have a small FW in the upper left corner to the right of the 100 if printed in Fort Worth. Bills printed in Washington, D.C. will not have any designation. The bill above does NOT have the FW which would have shown to the right of the upper left 100 and to the left of the small “H” above the word “Reserve.”
The back of the new bill changed too.
Two prominent changes occurred on the reverse of the new $100. The most obvious change includes the large 100 across the right end of the bill to help the vision impaired see the denomination more easily. The second difference is the view of Independence Hall. Instead of a front view of the building, the new bill shows a picture of the back of the structure.
Now with all of the excitement surrounding the new bill, it won’t be available until February 10, 2011.
In the meantime, the Bureau of Engraving and Printing has wonderful information available on their new money web site:
The new $100 bill launch video can be seen on their site or on their YouTube site.
They offer an interactive tour of the new $100 bill on their site. Click on the blue box that says “Explore the Interactive Note” for a fun tour – self-guided or virtual.
Perhaps the most informative is their New $100 Bill page.
But, given that the note will not be out for another almost ten months, take a look at the older versions of Ben and the earlier security measures introduced in the Series 1996 – 2003A on the Bureau of Engraving and Printing’s money factory site.
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The $50 Note
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Have you heard the hoopla around Congressman Patrick McHenry’s proposed legislation to replace the President Ulysses S. Grant portrait with that of President Ronald Reagan on all $50 bills printed after December 31, 2010?
It’s both interesting and sad to read all of the “us vs. them” discussions in the media and in the blogs. In other words, this is definitely not a bipartisan issue.
Take a look at some of the views as seen here: The Ronald Reagan $50 bill. Some of the links in that article go to writers with very angry viewpoints.
Interestingly, another article out of California claims there’s dissension not only across the aisle in Congress but also within the same side: Congressman wants Ronald Reagan to replace Ulysses S. Grant on the $50 bill.
Per this CNN article, earlier failed efforts proposed putting Reagan’s image on the dime, the $10 note and the $20 note.
Rather than a political issue, perhaps the recognition of our currency is more important. In response to the general question about changing the portraits on our currency, the Bureau of Engraving and Printing responded, “Changing the size or portrait figures would not improve security, but it would contribute to potential confusion for the millions of people around the world who recognize the traditional overall appearance of U.S. paper money, including the portraits that are linked to specific denominations.”
Does that mean we can never change the currency? No, but it certainly identifies a big problem with change – confusion and lack of recognition, not just domestically but around the world.
Rather than debate the Grant versus Reagan issue, let’s just review some information about the $50 bill.
President Grant’s portrait showed on the Gold Certificate of 1913 and the Federal Reserve Note of 1914. In 1929, the currency was standardized to the current size, and the $50 note consistently used only one portrait of Grant. A picture of the pre-1996 $50 with the chosen portrait of Grant can be seen here.
In the fight against counterfeiters, the $50 bills printed Series 1996 to 2001 contained additional securityfeatures. In particular, a watermark containing Grant’s portrait is included in the cotton linen blend before printing. A security thread containing “USA 50″ and a small flag runs across the bill just to the right of the portrait and can be seen from both sides of the bill. Fine lines that are difficult to replicate are used in the background of the portrait and the US Capitol on the reverse. Other characteristics such as microprinting in the border and Grant’s collar, color shifting ink in the lower right “50″ on the front and the large “50″ on the back changed the look of the bill as well.
More security features were added and a new $50 bill entered circulation in September 2004. The watermark, security thread and color shifting ink continued in the new bill. In addition, blue and red color was added to both sides of the bill along with blue stars to the left of the portrait and red stripes to the right. In addition a single star sits just above Grant’s left shoulder. Grant’s portrait changed to flow into the bottom border and no longer has the oval border. The microprinting increased to include words in several places on the bill. The Bureau of Engraving and Printing added an interactive display of the bill on their newmoney website to help people learn the features of the new bills.
On average, the Bureau of Printing and Engraving claims the $50 bill lasts for 55 months. Plus, they note, “To stay ahead of currency counterfeiters, the U.S. will be introducing new currency designs every seven to ten years.”
Let’s look at the number of $50 bills printed since 1980. (The years are fiscal years for the Bureau of Engraving and Printing.)
That’s an interesting chart considering the goal of getting more secure bills in circulation. With a life span of 55 months (less than five years), the later years’ production numbers seem low.
Could it be that more electronic banking and funds transfer are reducing the need for the $50 bill?
But, with today’s economy, people use more cash. Perhaps more $50 bills will be needed in the near future. Or, it could be that people just do not use that many $50 bills. Perhaps the $20 and $100 bills are more popular.
Take a few minutes to browse the currencies and become familiar with the security features that can be readily seen without black lights or other devices. The Bureau of Engraving and Printing states, “Because security features are difficult for counterfeiters to reproduce well, they often do not try, hoping that cash handlers and the public will not check their money.”
If you use or accept cash, a few minutes educating yourself could prevent the loss of $50 or more.
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Another Cautionary Tale
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Years ago, more than I care to count, a high school history teacher asked for a show of hands of those who believed people were inherently good. She was dismayed that I chose not to raise my hand in response to her question. As a result, I was chastised for thinking bad of people.
Now, I don’t really believe people are, at their core, ruthless and corrupt. On the other hand, being somewhat of a skeptic in nature, I prefer to hesitate and learn more before trusting people unquestionably.
President Reagan’s comment, “trust, but verify,” applies much more appropriately than that long ago high school history teacher’s right-versus-wrong-with-no-shades-of-gray question.
OK, so what does this discussion have to do with coins?
Well, it seems, once again, someone trusted a coin seller on the internet (Craig’s List) only to receive a counterfeit coin in return for their payment.
This coin was a beauty – a 1901 New Orleans Morgan dollar graded MS-63 in a PCGS certified holder.
As a professional organization, PCGS offers a cert verification service on their web site for customers to research and verify PCGS slabbed coins. One simply enters the certification number from the slabbed coin, and the PCGS web site returns information about the coin. They provide general information about the coin’s characteristics including denomination, date, mintage and mint facility. Plus, they provide details about the coin such as the grade, the PCGS coin number and the estimated value of the coin.
If there is a picture of the coin on the internet and the buyer used the PCGS web site to verify the coin, why did they still get bamboozled into buying a counterfeit coin?
Have you ever noticed that some criminals are very smart and go to great lengths to deceive people into buying counterfeits? Frequently criminals go to greater lengths than would be necessary in an honest undertaking.
In this case, the criminals purchased the real 1901-O coin that PCGS graded and placed in their protective slab with the PCGS identifying numbers, hologram and bar code certifying the coin. The criminals then duplicated their real 1901-O coin along with the PCGS holder and information. Their copies will be sold as many times as possible before the certifying numbers become identified as likely being a counterfeit coin in numismatic circles.
The 1901-O dollar is a nice coin but not terribly expensive. Therefore, people will get angry at receiving a counterfeit coin, but they will decide the time and cost to chase the criminals will be more than the money already lost on the counterfeit coin. Had the counterfeiters copied a much higher value coin, people would pursue the criminals more diligently.
When buying coins on the internet, choose to purchase from reputable dealers. Yes, we would like to think everyone is trustworthy and above reproach, but the internet makes it too easy for criminals and less-than-honest individuals to take advantage of unwary buyers.
As President Reagan cautioned, “Trust, but verify,” especially when parting with your hard earned money.
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Bait and Switch
Normally, you hear about bait and switch tactics being used by merchants. However, in the coin collecting world, bait and switch can be used by customers as well.
What is bait and switch?
In general terms, bait and switch occurs when a merchant advertises a great deal on one or more products to interest buyers. When customers attempt to purchase this great deal, the merchant is out of the special but has an alternative you can buy. The alternative may be more expensive or it can be lesser quality, either way, the merchant gains a bigger profit margin.
The “baiting” grabs your interest; the “switching” provides greater benefit to the seller.
Now, you’re thinking, “How does this work with the customer doing the baiting and switching?”
Well, it’s simple really, and it’s frustrating, too, for the sellers.
Let’s look at an example between Dealer Jim and Numismatist Bill. Jim can be a large dealer with a store and staff, or he can be an individual seller on eBay. Bill, the buyer, can be another coin dealer buying long distance from Jim, or he can be an indivdual collector.
Either through the internet or other marketing vehicle; for example, cable TV shows or coin magazine ads; Bill buys a coin from Jim. Per the agreement, Jim ships the coin to Bill.
Time passes, Bill decides he is unhappy with the coin and returns it to Jim. Upon receipt of the coin, Jim notices the packaging is different from what he sent Bill. Looking more closely, he notices the coin is not the same coin.
In some cases, Jim confronts Bill with the fact that the returned coin is not the same as the one sent. In other cases, he puts Bill on the “do not sell to this person” list. And, in still other instances, Jim takes the fight public (in chat rooms and forums) to alert others to Bill’s perfidy.
Jim’s actions depend on the situation. Is the dollar value lost worth the cost of the time to fight the issue? The Bills of the world gamble that the Jims will just let it go. But, sometimes, the Jims of the world get fed up with the Bills and fight the good fight to get either their coin or their money back.
If you are a buyer and do this bait and switch with coins, shame on you. Remember the adage, “What goes around comes around.”
If you are a seller, technology helps you especially with small quantities. Yes, the effort adds time to the process, and whether you do it or not depends on your risk tolerance and how much you’ve lost in the past.
What technology? The digital camera.
Before Jim sends the coin to Bill, he takes pictures of the coin, obverse and reverse, and of the box and certificates. He copies the photos to his computer and names the files with identifiers pertinent to Bill, the coin and the date. He can include these pictures with the coin in the shipment to Bill, he can send Bill the pictures via email, or he can note the filenames along with a short description of the pictures on the packing slip to Bill. In all cases, Bill is aware that Jim has photos of the coin.
The deceit of the Bills of the world exists. Sometimes the extra effort to stop them, either before or after they try their dishonest tricks, just isn’t worth it. Other times, the extra time and effort of preventative measures can save you from a large loss.
Col. Steven Ellsworth on Coin Show Security
Col. Steven Ellsworth shows the 16 major (3 and 4 day) shows with the best security in 2009 in this article in Numismatic News: Expert Ranks 2009 Coin Show Security. (You can find other pertinent security articles on Col. Ellsworth’s web site. Here’s one: Coins and Home Security.)
Many of his comments in the Numismatic News article seem directed to coin dealers, however these same security issues apply to coin collectors and investors as well.
Col. Ellsworth chose not to mention the names of the security companies for the 16 shows he determined to have the best security.
However, let’s shine a beacon of light on two of the shows in Col. Ellsworth’s list: the Blue Ridge Numismatic Association, Dalton GA and the Georgia State Numismatic Association, Dalton GA.
Those of you who visit the Greater Atlanta Coin Show see Jim Sherrill providing security for our monthly show. Jim’s security company also provides the security for both the Blue Ridge Numismatic Association and the Georgia Numismatic Association shows in Dalton.
We are proud to say that Jim has provided security for the monthly Greater Atlanta Coin Show since it began over 20 years ago.
Kudos to you, Jim Sherrill, for the recognition from Col. Ellsworth, and thank you for your years of security service to the monthly Greater Atlanta Coin Shows.
Well done, my friend, well done.
Counterfeit Collectibles
Among the dealer community, frequent comments occur about how the counterfeiters, usually in China, are improving their techniques making it imperative that dealers be always on guard for the counterfeit coins.
The good news is the dealers educate each other and can still identify the counterfeit coins. The bad news is if you are a collector, and perhaps are not as familiar with the issues, you could easily be scammed on ebay or other sources.
In one counterfeit scenario, the counterfeiters started making AU (Almost Uncirculated) coins. They probably thought an AU coin would not raise as much suspicion and be easier to proliferate among the collector community. But, though they could make the obverse and reverse in AU condition, the rim wear did not match – too perfect for the other fake wear on the coin.
In another situation, the counterfeit coin in a PCGS holder appeared real, however the obverse and reverse did not match. Yes, they were from the same type of coin, but when reviewed closely, the unique details on the obverse did not match the unique details on the reverse. Now, did someone cut two “bad” coins and meld them together to make the one good one? Or, did someone use two different coins to counterfeit the front and back dies for the fake? If the second scenario, there could be other coins with this same problem. Oh, as for the PCGS holder, it was fake as well, but it could certainly fool the unsuspecting.
These examples are not meant to scare anyone. In any situation, you need to be alert to scams and scam artists. It’s amazing how much effort and time the scam artists apply to defrauding people when they could make an honest living with less effort and risk. But, our biggest threat still comes from China. They do not view counterfeiting collectible coins as a crime.
If you are an experienced and passionate collector, you know your coins. With the counterfeiters improving their techniques, you need to be more alert to potential problems. Even the experienced can be taken by the con artist if you are not always careful. That also means you need to be alert when buying from trusted sources. They are fallible and could be victims as well.
If you are a new collector, do your homework and ask questions of experienced people. Numismatics continues to be rewarding in many ways.
