More than 270 billion radio-frequency ID tags could be sold around the world by 2016, predicts the European Union. But many people are worried about the impact the technology will have on their lives.
Many pets have RFID tags to identify them
What are radio frequency ID tags?
They are small devices that store data that identifies the object to which they are attached. They have been called "smart barcodes" and are intended to take over many of the jobs of those ubiquitous black and white stripes.
The data onboard an RFID tag can be read at a distance via radio. They typically combine a small amount of computer memory with a radio antenna.
There are two types of radio frequency ID (RFID) tags: passive and active.
Passive tags have no battery onboard but the current generated when they are scanned with a radio reading device powers the tiny circuit and makes it emit a signal.
Because of this the data in passive tags can only be read over small distances - up to a few metres.
The small size of these tags- which often lack an antenna - mean they often only hold an identity number. The smallest passive tags are as thin as paper and about a quarter of a millimetre square - slightly larger than the full stop at the end of this sentence. Adding an antenna makes them much larger - about as big as a first class stamp.
Active tags are bigger, always have an antenna and are fitted with their own battery. These tags can be read over distances of hundreds of metres and have a lifetime of about a decade.
They hold much more data about the object or objects to which they are attached.
Active tags often have other sensors onboard that help monitor the object, such as a cow or volatile chemicals, to which they are stuck. In this way they could report the location of a cow if it wanders off or if explosive chemicals are getting too hot.
Why are they useful?
Barcodes have made big differences to business as they help to track goods, keep shelves stocked and ensure you pay the right price for what you buy.
RFID tags promise to do what barcodes do and add much more to it.
To begin with RFID tags make it much easier to keep an eye on goods as they move from where they are produced to where you buy them.
Tesco is starting to make more use of RFID tags
They make it possible to check what is on a particular lorry just by driving it through a really big reading device. Individual boxes no longer have to be scanned one-by-one.
Because of these innovations businesses are likely to be the first adopters of RFID technology to streamline the delivery of goods to shops.
In the US retail giant Wal-Mart has started a big RFID trial and demanded that its key suppliers adopt the technology. Tesco has also started using the technology in the supply chain that keeps its superstores fully stocked.
While businesses are keen to use RFID tags there is one big stumbling block - price.
Currently even the smallest passive tags cost a few pence each which makes them too pricey to put on every tin of beans. Because of this businesses see them being used to label up boxes or pallets of goods rather than individual items.
Prices are dropping and work is being done on technology that would enable RFID tags to be printed almost as cheaply as barcodes. Once that happens passive tags could be everywhere. Some have said that this will create an "internet of things" in the same way that now we have an "internet of computers".
Also many governments are starting to consider putting RFID tags on passports and other ID documents so they can be machine read.
Sounds good, are there any pitfalls?
Lots. To begin the sheer amount of data that a company could gather about its supply chain could be overwhelming but work is going on to understand what data is actually useful.
Beyond this, widespread use of RFID tags raises all kinds of personal privacy issues.
Some fear radio tags will erode personal privacy
Once the goods you own can tell a tale about who they are, this could add depth to any large scale surveillance plan. Some digital rights campaigners say RFID tags should be disabled when you pay for the goods they are on.
However, access to the data that can link passive tag data to credit cards and where they were bought is likely to be only available to law enforcement.
Many privacy advocates are concerned about active tags that can be read at a distance and fear these could be used in covert monitoring schemes.
In Europe the EU has held a consultation exercise to gather opinions from citizens and industry on RFID tags and how they should be used.