Invented in 1969 and patented in 1973, but only now becoming commercially and technologically viable, RFID tags are essentially microchips, the tinier the better. Some are only 1/3 of a millimeter across. These chips act as transponders (transmitters/responders), always listening for a radio signal sent by transceivers, or RFID readers. When a transponder receives a certain radio query, it responds by transmitting its unique ID code, perhaps a 128-bit number, back to the transceiver. Most RFID tags don't have batteries (How could they? They're 1/3 of a millimeter!). Instead, they are powered by the radio signal that wakes them up and requests an answer.
Most of these "broadcasts" are designed to be read between a few inches and several feet away, depending on the size of the antenna and the power driving the RFID tags (some are in fact powered by batteries, but due to the increased size and cost, they are not as common as the passive, non-battery-powered models). However, it is possible to increase that distance if you build a more sensitive RFID receiver.
RFID chips cost up to 50 cents, but prices are dropping. Once they get to 5 cents each, it will be cost-efficient to put RFID tags in almost anything that costs more than a dollar.
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