Radio-frequency identification (RFID) is a technology that uses communication through the use of radio waves to transfer data between a reader and an electronic tag attached to an object for the purpose of identification and tracking.

RFID makes it possible to give each product in a grocery store its own unique identifying number, to provide assets, people, work in process, medical devices etc. all with individual unique identifiers – like the license plate on a car but for every item in the world. This is a vast improvement over paper and pencil tracking or bar code tracking that has been used since the 1970s. With bar codes, it is only possible to identify the brand and type of package in a grocery store, for instance. Furthermore, passive RFID tags (those without a battery) can be read if passed within close enough proximity to an RFID reader.

It is not necessary to “show” the tag to the reader device, as with a bar code. In other words it does not require line of sight to “see” an RFID tag, the tag can be read inside a case, carton, box or other container, and unlike barcodes RFID tags can be read hundreds at a time. Bar codes can only read one at a time.Some RFID tags can be read from several meters away and beyond the line of sight of the reader. The application of bulk reading enables an almost-parallel reading of tags.

Radio-frequency identification involves the hardware known as interrogators (also known as readers), and tags (also known as labels), as well as RFID software or RFID middleware.

Most RFID tags contain at least two parts: one is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions; the other is an antenna for receiving and transmitting the signal.

RFID can be either passive (using no battery), active (with an on-board battery that always broadcasts or beacons its signal) or battery assisted passive (BAP) which has a small battery on board that is activated when in the presence of an RFID reader. Passive tags in 2011 start at $ .05 each and for special tags meant to be mounted on metal, or withstand gamma sterilization go up to $5. Active tags for tracking containers, medical assets, or monitoring environmental conditions in data centers all start at $50 and can go up over $100 each. BAP tags are in the $3–10 range and also have sensor capability like temperature and humidity.The term RFID refers to the technology. The tags should properly be called “RFID tags” not “RFIDs”.

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