RFID works using small (sometimes smaller than a fingernail) pieces of hardware called RFID chips. These chips feature an antenna to transmit and receive radio signals. So-called passive RFID chips do not have a power source, but active RFID chips do. RFID chips may be attached to objects, or in the case of some passive RFID systems, injected into objects.
Whenever a reader within range sends appropriate signals to an object, the associated RFID chip responds with the requested information, such as an identification number or product date. (Passive RFID systems derive their energy to send responses from the incoming signal.) The reader, in turn, displays the response data to an operator. Readers may also forward data to a networked central computer system. RFID systems generally support storing information on the chips as well as simply reading data.
RFID systems were created as an alternative to barcodes. Relative to barcodes, RFID allows objects to be scanned from a greater distance, supports storing of data, and allows more information to be tracked per object.
RFID has raised some privacy concerns due to the invisible nature of the system and its capability to transmit fairly sophisticated messages.