National Science Foundation, NSF, provides funding to increase the privacy and security of RFID smart tags, through better cryptographics.
... "Strengthened security for smart tags - the wireless devices that allow drivers to zip through automatic tollbooths or pass a security desk with the flash of a card - is the aim of a new initiative that has received $1.1 million from the National Science Foundation. Led by Kevin Fu of the University of Massachusetts Amherst, the researchers are developing much-needed cryptographic protocols, hardware and applications for the increasingly common devices. Millions of consumers already use smart tags—wireless devices that use radio waves to identify and authenticate people and things - and they will become more numerous, says Fu.

Smart tags - which include Radio-Frequency Identification (RFID) tags—are already used to track items from library books to merchandise to cattle. Increasingly, they are replacing the magnetic stripe cards used in security badges and mass transit cards, sometimes also serving as electronic cash. The tags will soon be incorporated into documents such as passports; their use is being explored for tracking medical records and prison inmates. But the tags, which also include contactless smart cards and low-resource sensors, are a technology that has crept in from the edge of the Internet and they present new challenges in terms of security and privacy issues, says Fu.
The unique environment presented by smart tags - they can operate without human intervention and without a physically connected power source - presents unique security concerns, says Fu. Smart tags automatically respond to the device that reads them, so human users don't have the traditional means of giving or denying consent to the reader. This infrastructure of untrusted readers and tags requires an approach that preserves privacy while maintaining the flexibility and convenience that the tags offer.
The new consortium, dubbed the RFID ConsortiUm for Security and Privacy (RFID-CUSP), takes these operating conditions into account and is designing new cryptographic definitions, algorithms and models that will lay the solid foundation on which secure applications can be built. As part of their project, the researchers are working with the San Francisco Bay Area Rapid Transit District (BART). The project will result in the first completely open, publicly available software for experimenting with RFID security and privacy. " ...

UMass Amherst:
UMass Amherst-Led Research Will Protect Consumers by Ramping Up Security for Smart TagsKevin Fu: "Open cryptanalysis of existing RFID protocols will give assurance in the soundness of reliable RFID technology. At
UMass, we are investigating how to build secure RFID-based systems. "
The Sensor Revolution: Industry & Commerce: "Radio Frequency Identification (
RFID) stands among the fastest-proliferating sensor technologies. RFID systems combine electromagnetic sensing with radio communications. RFID tags and interrogators can be used to track inventory in a warehouse or collect tolls from moving cars. "
Understanding Contactless Smart Card Technologies and Some of the Leading Reader/Card Product Providers (PDF): "That transmission could then be replayed to a reader to gain access illicitly at some time in the future. In contrast, today’s secure contactless cards and readers (such as XceedID ISO-X and HID iCLASS) employ a myriad of cryptographic techniques. These techniques encrypt data in ways that render it useless to an illicit user. Thus, traditional proximity cards and readers provide inferior communication security when compared to secure contactless smart cards and readers. "
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