NFC Tags Used to Track Gold and Silver?
Gold refiners and bullion dealers are always looking for ways to make purchasing and owning precious metals safer and more secure. Privacy is undoubtedly one of the typical gold buyer's prime concerns. This is true whether someone is a small-time silver stacker or a high-end investor in bulk amounts of gold.
At the same time, anti-counterfeiting and authenticity are key issues that both the customer and seller must be aware of. These competing problems—guaranteed authenticity and quality on one hand, and privacy from potential theft on the other—are in direct conflict in regard to one of the industry's newest security initiatives.
RFID and NFC
Two of the leading technologies that are increasingly being used for purposes of authentication (like verifying credit cards) are radio frequency identification (RFID) and near field communication (NFC). Devices and products containing these technologies are becoming more widespread, but they also have raised concerns about privacy among consumers. Can the RFID chips in their credit or debit cards, for instance, be scanned from afar and have their data stolen? Many have heard of this type of phishing scam occurring at gas station pumps.
In its less nefarious form, RFID is used for tracking inventory and other information about products. Similarly, NFC is a popular way to track location and other data about an item carrying this digital signature.
However, this means that a trove of data is automatically being stored about who bought the product, and even where it was shipped. More to the point, like anything else connected to the web, this data may be accessible to hackers.
Working at Cross-Purposes
Some third-party grading services have explored the use of NFC technology to combat counterfeit coins. The point would be to assure a secondary-market customer that a graded coin is indeed real (rather than a coin of lesser quality, or a fake, in a fake holder). Theoretically, one could just scan the label on the TPG holder and quickly get an up-or-down answer about its authenticity.
Background image courtesy Nfcopen via Wikimedia Commons [CC BY-SA 3.0]
Although from a certain perspective this plan makes some logical sense, it could prove to be an enormous problem for the precious metals market. Now, certain dealers and refineries are even considering embedding NFC tags in actual silver rounds.
Rest assured, Gainesville Coins will never sell any NFC-embedded coins or bullion products. With the privacy risk these products could pose to our customers, we will never carry NFC- or RFID-enabled precious metals in our inventory.*
Given that many bullion customers are already skeptical of their postal worker knowing that they are delivering precious metals for fear of theft, the notion that a gold purchase could be tied to all sorts of personal data about the buyer should be alarming. NFC-enabled coins or bullion could presumably generate reports about the sale that include location data and the quantity of metals purchased. This essentially defeats the purpose of owning physical gold if the government, financial institutions, or even potential criminals can simply access a database to find out who has been buying precious metals (and where).
The trade-off will likely seem inequitable to most: adding NFC tech to gold or silver products may provide collectors and investors with certainty about the item's authenticity, but at the cost of possibly giving someone you don't want knowing about your bullion a road map to your valuables!
*The anti-counterfeiting security features of Royal Canadian Mint products use micro-engraving rather than any sort of radio frequency. They don't fall under the purview of this kind of technology.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.
Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.
Latest Offers, Straight To Your Inbox
Don't be the last to know about the latest deals and new product arrivals. Join us today for FREE!