How does the authentication in the new UK £1 coin work?

http://security.stackexchange.com/questions/53673/how-does-the-authentication-in-the-new-uk-1-coin-work

by jpalomaki • 12 years ago

99 63 12 years ago

security.stackexchange.com

The formula of the additive is now a secret waiting to be stolen. Interesting technology, though I don't get why it's introduced today, since it looks like something that could have been easily implemented 10 or even 20 years ago. So, why today? Cost effectiveness of the technology? Political decisions?

k-mcgrady• 12 years ago

It's not even being introduced today - it won't be released until 2017. I believe that's mainly because every machine that accepts the £1 coin has to adapt. Apparently that's going to cost £20 million.

> "The formula of the additive is now a secret waiting to be stolen."

True but it's possible that this, plus the strange physical design of the coin, could increase the cost of counterfeiting to make it unprofitable.

Maxious• 12 years ago

An Australian company was selling "trade secret" additives as an anti-counterfeiting measure that they said were unique to each client... but were actually bought in bulk from China and could easily be reverse engineered.

http://www.smh.com.au/technology/sci-tech/how-the-csiro-chea...

grey-area• 12 years ago

Of course if you're sophisticated enough, or have the right connections, any security scheme is breakable. It's probably been introduced because the salesman from the company that produces coins pushed it as the solution to widespread counterfeiting of £1 coins. At present people make really rudimentary fakes from things like painted lead, which they pass off as real.

For those who produce the additive and detection machines of course, this will be a bonanza - I wonder whether the ink company also sells detection mechanisms? It'll be interesting to see how many vendor machines simply move to using cards instead in response - why bother buying a new detection mechanism when you could just stop accepting coins? I can imagine London Underground doing this in a few years for example.

At present machines and people go on form and weight, if the bank can add a certain response to UV or radio to that, it might make it significantly more difficult to copy the coins. I imagine the response of forgers to this will be to develop a UV coating to be screened on to coins which will fool machines (which are going to be pretty basic), rather than trying to mimic the material itself. Many machines will never use the much trumpeted benefits of this system, because it'd be too expensive, they'll probably just go on shape and weight as usual.

These clunky coins are going to be extinct in a few decades anyway though - governments already issue more of their currency in electronic form than physical coin, and I suspect most people will happily use the internet and cards for everything and drop cash and cheques. At that point physical currency will be withdrawn, because it is such a burden to produce and police, I'm not even sure if you need a replacement token which can be shuffled around like bitcoin, or if everyone will be happy using verified transactions and ledgers as they do at present with banks. So the mint will eventually be out of business except in selling commemorative coins.

buro92• 12 years ago

Sales.

A bit like the UK MoD taking on a weapon when the real market is to sell the weapon to other countries. It's a way for the UK government to support UK industry.

The Royal Mint is the world's leading exporter of currency selling to over 60 countries, and this is their sales pitch for the next 30 years.

By securing the use of the technology in the coinage of the UK as early as possible, they are able to use that as a strong signal to other countries in the future who are assessing their coinage needs.

The UK taking on this coin now, is a sales pitch. An effective one.

Patents.

The second part of why now is that they've patented all of this. The replacement cycle for coinage is long (30+ years), and if they fail to make significant sales in the next 15 years they are not going to be getting significant benefits from their patents.

They need to get as many sales in the next 15 years as possible to have effectively used the period of exclusivity the patents granted.

Someone• 12 years ago

And, given the claim "built in technology for high speed authentication and verification everywhere from ATMs to vending machines and point-of-sale."*, they will have to go to extraordinary measures to prevent the secret from being leaked.

The skeptic in me thinks the only real way to prevent fake coins (or bank notes) from entering circulation is to make production more expensive than their nominal value (that approach is economically valuable because one could see the loss of value of a coin when recycled as a tax on each transaction. Let's say a one pound coin costs 1.5 pounds to make, with half a pound of raw materials, so that 1 pound is lost over its lifetime. In 30 years, that coin may change hands, 5000 times, so that the loss per transaction is .02 cents)

You could make it expensive to make a coin by putting more than the nominal value worth of raw material in each coin, but that, obviously, is a bad idea for a different reason: people would recycle the money.

So, a solution must be sought in making it hard to make coins. Any complicated technology will work.

The mentioned electroplating method might be such a technology. I think it might even be possible to write a pattern over the surface of the coin by using techniques similar to those used in chip making. Unbeatable? No, but it might drive the cost of counterfeiting a coin up enough to kill the market, that is, until somebody figures out a cheap way to replicate the technology, or until somebody finds a just good enough approximate technology that beats the scanners.

corin_2• 12 years ago

Are counterfeit pound coins actually an issue? The only real security measure they're known for is patterns / text around the rim which dates back to the days when the metal was valuable enough for people to cut slivers off to melt down while keeping the coin roughly circular.

I find it hard to believe that anyone with the inclination to break the law in such a big way, and the resources to do it, would chose pound coins as the thing to counterfeit. I could be completely wrong..?

Edit: Of course I presume I must be wrong by the fact that this coin is being introduced, I guess my question is how wrong am I - how is making fake coins worth the effort?

shakethemonkey• 12 years ago

Perhaps a more pressing issue is the similarity of any particular coin's characteristics with the wide variety of foreign coins available (numismatic birthday attack)

memsom2• 12 years ago

That used to be more of a problem. prior to the Royal mint resizing the 5, 10 and 50 pence coins, the 10 and 50 were exactly the same size as other international coins of a much lower face value. The Kenyan 1 and 2 Shilling comes to mind. A friend at University from Kenya used to use those coins to phone home in payphones. I don't know the specific exchange rate at the time, but they were worth pennies in Sterling from what I remember. The Irish coins, worth less than UK Sterling, also had similar sizes and some of the Australian and New Zealand too. Usually the coins were small face value, but even so, it was possible to pass them off.

dan1234• 12 years ago

It's thought that around 3% of the 1.5bn coins in circulation are fakes, with 2 million being removed each year.

Source http://www.bbc.co.uk/news/uk-politics-26632863

GunlogAlm• 12 years ago

Yes, it's a big issue here.

From the Royal Mint:

The Royal Mint regularly conducts surveys to estimate the level of counterfeit £1 coins in the UK. A survey undertaken in November 2013 found that the rate of counterfeit UK £1 coins in circulation at the time had risen from 2.74% to 3.04%.

http://www.royalmint.com/discover/uk-coins/counterfeit-one-p...

And:

The move comes amid concerns about the 30-year old coin's vulnerability to counterfeiting, with an estimated 45 million forgeries in circulation.

http://www.bbc.co.uk/news/uk-politics-26632863

danieltillett• 12 years ago

Are really 3% of all 1 pound coins counterfeit or is this just a case of Gresham's law http://en.wikipedia.org/wiki/Gresham's_law

viraptor3• 12 years ago

Ok, so there's a claim I don't understand: ""One in 30 pound coins is counterfeit, and that costs businesses and the taxpayer millions each year," Mr Osborne continued." - but if they take ~2M of them out of circulation every year (which I assume means only a bit more are added), that means we effectively cancel (using £2.2 trillion M4 money supply in 2010) 0.00009% inflation. Since the current inflation is at ~2%, this should not even register. I mean, for others it doesn't matter who produces the new money to regulate inflation (apart from the problem of someone gaining <£2M from it, but if that's spread between many parties... who cares?). 35M 1£ coins were minted in 2013 anyway - I get an impression that the cost to businesses and the taxpayers would be lower if they just subtracted the predictions of fakes from the next year's minting.

Happy to be proven wrong of course

(I couldn't find an official estimate of number of coins lost every year, it would be interesting to look at that too)

(sources: m3 supply data http://www.tradingeconomics.com/united-kingdom/money-supply-..., inflation http://www.tradingeconomics.com/united-kingdom/inflation-cpi, minted quantities http://www.royalmint.com/discover/uk-coins/circulation-coin-...)

Kliment• 12 years ago

The article linked in the article says 1 in each 30 pound coins are counterfeit.

rm445• 12 years ago

I have seen fake pound coins in the wild. My brother who does electronics work on fruit machines (low-stakes gambling terminals) has said he sees them all the time.

I couldn't tell you whether defrauding such machines is the 'killer app' to drive coin counterfeiting on a large scale. The UK has millions of betting machines with small payouts (e.g. £50) but a smaller number with larger payouts, concentrated in betting shops, casinos etc.

adrianhoward• 12 years ago

Yes - they are an issue. Currently about 1 in 30 pound coins in circulation are counterfeit - so that's about £45 million in circulation (source http://www.theguardian.com/news/datablog/2014/mar/19/five-th...).

I suspect generating them is less effort that many people think. This guy http://www.dailymail.co.uk/news/article-502292/Counterfeiter... - was convicted of creating 14 million fake £1 coins and the technical side was basically a one man operation.

glomph• 12 years ago

That is still a pretty small amount given the other amounts of money being discussed in the budget.

lotsofmangos• 12 years ago

They exist, and generally they don't bounce the same if you drop them.

memsom2• 12 years ago

I have a pot that I throw my change in to - there's £27 in £1 coins, and one is either fake or has turned a very dubious colour.

Some fakes are amazingly real looking, some are so fake looking I find it amazing anyone actually believed it was real. I always seem to get them in small shops, pubs and take aways. Usually from independent traders who deal mostly with cash. I guess this is because the fraudsters can get away with passing them off more easily to those kinds of businesses?

lifeisstillgood• 12 years ago

To be quite honest I think we all ignore fake pound coins. Yes the obvious ones are obvious but they simply stay in circulation - you are going to use it soon and that person will pass it on too.

I think one pound is below the "worth bothering about" level, which probably makes it an ideal counterfeit target

Theodores• 12 years ago

If you have the 'right' connections you can buy counterfeit pound coins, e.g. £60 - £80 buys you 100 of them. The price of the fakes varies, the ones that weigh the correct amount come at a premium as you can just put them in to vending machines and get useful stuff in return. The ones that don't work that way are obviously harder to spend, particularly if the colour is not quite as shiny as the proper ones. With those you really do run the risk of getting caught, particularly if you tried to pay for £50 of grocery shopping in pound coins that happened to be extra heavy, nearer black in colour than shiny gold and all from the same year...

There is a whole other economy out there - think drugs - where fake coins are just another thing to sell/launder. People that buy drugs with a view to selling them in order to make the money needed to pay for their own habit are well placed to 'shift' fake coins and notes. They are not going to snitch either, this is because most people that buy drugs have just the one supplier, perhaps with someone else they can call on in emergency drought situations. To grass on their dealer is just not going to happen - they would lose their supply, possibly get nicked themselves and create lots of enemies in their scene. If fake coins get passed on through that same supply route then nobody is going to tell.

The thing with the coins is that they only have to be passed off once from the 'black' economy to regular-commerce-land whereas the Royal Mint has to make coins that circulate for decades. For the counterfeiters it is easy to get the Queen's head stamped on there with some ridges around the edge, getting the weight and colour finish right has cost implications, hence this is not necessarily done to high-class forgery standards.

I do wonder what the police would view as more serious - selling class 'A' drugs or laundering fake currency. I suspect the latter. Nonetheless, I hope that you now see how counterfeit coins have a route to market, why they don't actually have to be that good and how it is that so many exist without anyone being able to say where they come from.

rcxdude• 12 years ago

I've come across about 5 of them: I mainly discover them by vending machines rejecting them. They circulate around small businesses which deal mainly in cash very easily.

buro92• 12 years ago

There doesn't seem to be a lot of information about it and the speculation is currently that there is an additive that can be seen through spectroscopy or light, a luminescence or particle based thing which is visible.

They also mention that iSIS is made of three security types: "overt, covert and forensic".

So I don't think it's the case that luminosity is the core of the security, that is just the overt layer.

The keywords they keep using are "integrated", "embedded" and they state that the coin is "full-plate" and that they can produce blanks (for full-plating) that have iSIS protection.

They also mention (in the bottom video on this page: http://www.royalmint.com/business/circulating-coin/isis ) that unlike electro-magnetic signatures that have variability and also can vary over time (with coin wear), the iSIS has a binary yes/no response: authentic or counterfeit. It's a signature detection technique and the signature is not related to the size/weight of the coin.

Is it possible to make the interior of the coin in such a way that a radio signal bounced off of it would produce a received signal of a certain signature?

Some of the speculation has focused on patents recognised as being held by the Royal Mint that dealt with luminosity in the plate layer. I think this is just one of the security measures, but isn't actually the iSIS method.

FatalLogic• 12 years ago

If it's just a simple additive with a detectable signature, then counterfeiters could obtain the same additive by grinding up real coins. Then they could apply a layer of that material to the surface of their fakes.

So I think, as you suggest, they must (also) be using an anti-counterfeiting method that's more sophisticated than a plain additive. At least an additive that wouldn't return the same signature after it has been reprocessed by counterfeiters.

darsham• 12 years ago

The problem is, when pressing the coins it might be difficult or impossible to apply such a layer properly.

If the verification is done with a part of the electromagnetic spectrum that somewhat penetrates the coin, then you'll need a very thick, "obvious fake" layer. I am not a physicist so this is just vague speculation.

A1kmm2• 12 years ago

If it works how I understand it does, getting the right combination of substances is probably just a matter of solving a linear programming problem.

As I understand the explanations, the basic measurement is obtained by illuminating the coin with light of wavelength λ_1, and measuring the intensity coming back of another wavelength λ_2 - let c be a putative coin, and I_c_{λ_1}_{λ_2} be the measurement. To detect a valid coin, the machine has a set of n standard values for a real coin 'C' at a range of (λ_1, λ_2) pairs I_C_{λ_1_i}_{λ_2_i} for i in [1, n].

To pass, a coin c has to match within a tolerance, i.e. for all i in [1, n], |I_C_{λ_1_i}_{λ_2_i} - I_c_{λ_1_i}_{λ_2_i}| < ε.

I am assuming that the set of I_C_{λ_1_i}_{λ_2_i}, and the (λ_1_i, λ_2_i) values will be public knowledge, because they are needed by privately manufactured machines working with coins.

The aim of a counterfeiter is to find substances s_j and the concentrations in which to mix in α_j for j in 1..l (to a base that has no fluorescence), so that the mixture c passes the intensity tests within tolerance. If we assume the substances do not affect each other significantly, then we can expect that

I_c_{λ_1_i}_{λ_2_i} = Σ_{j=1}^l α_j I_norm_{s_j}_{λ_1_i}_{λ_2_i}.

Using an off the shelf spectrofluorometer (or even a modified coin reader) a counterfeiter could obtain the I_s_{λ_1_i}_{λ_2_i} for a wide variety of substances s, which can be normalised to be per unit of concentration.

Given a bank of substances s_j for i in 1..l (the counterfeiter can choose an l that is large enough to make the attack work), with known I_{s_j}_{λ_1_i}_{λ_2_i} values, it is easy to solve for a least squares concentrations vector α. Let A be an l by n vector such that A_ij = I_norm_{s_j}_{λ_1_i}_{λ_2_i}. Let y be the column vector such that y_i = I_C_{λ_1_i}_{λ_2_i}.

Let t(A) denote the transpose of vector A. Using the simplex algorithm, solve t(A)y = t(A)A \hat{α}, subject to all concentrations being greater than or equal to zero, yielding the least squares solution \hat{α}. If the result is within tolerance, the counterfeiter has a viable solution, if not they need a larger or different pool of starting substances.

In practice, they might want to reduce the number or cost of substances they use. They could use an optimisation method such as a genetic algorithm to find the lowest cost set (taking into account set size and the price of substances) that results in an acceptable \hat{α} solution.

Of course, these coins are fairly low value, and in practice counterfeiting the coins might not be that profitable anyway given the low value of the coins and the amount of labour needed to get any significant amount of real currency in exchange for the coins without detection, so someone capable of making a counterfeit might be able to use their skills more profitably elsewhere.

ricardobeat• 12 years ago

The method of reading described in the patents is reading the emissions from the coin after the light source is turned off. So a counterfeit would have to match the specific absorption/emission profile of the original - I think this makes counterfeiting many levels of magnitude harder.

oakwhiz2• 12 years ago

However because this new coin is being touted as very secure and not falsifiable, people may not catch on to the fact that you are counterfeiting the coins, because they might just assume that they cannot be counterfeited. So perhaps counterfeiting the coins would actually end up being profitable in the end.

A1kmm2• 12 years ago

Also, it might even make counterfeit coin production cheaper if it replaces rather than supplements current detection methods - maybe a counterfeiter can make a plastic or wooden coin of roughly the right shape and paint it with a paint containing the appropriate mixture, and then trick a vending machine into giving them non-counterfeit change.

phreeza• 12 years ago

I would guess the I_C_{λ_1_i}_{λ_2_i} and (λ_1_i, λ_2_i) will be protected by some sort of security by obscurity, and coin reader manufacturers will only be given the info if they comply with some sort of security process and make it hard to extract the info from a coin reader. Probably just a way of making it harder to reverse engineer, not impossible.

kens• 12 years ago

I think the problem is chemistry, not math. If you don't start with phosphors with the right behavior, you can't combine them to get the result you want.

Specifically, the math breaks down at "subject to all concentrations being >= 0". This is exactly the same reason you can't generate all visible colors from RGB or CMY (http://en.wikipedia.org/wiki/Gamut) - there are colors outside the linear combination of the starting values. And the problem is much worse here, because the number of dimensions is much greater than three. (You also have to assume the mint will watch purchases of the necessary phosphors.)

For reference, the relevant patent (via SO) is https://www.google.com/patents/US20110305919

oakwhiz2• 12 years ago

I wonder what the false negative rate for this coin will be in vending machines. When the coins are subjected to real-world conditions, will this reduce the coin's ability to authenticate with the vending machine? If the coins are being authenticated using a chemical marker of some kind, will the coins' exposure to other chemicals, dirt, or temperature affect the coins' ability to authenticate?

Zenst• 12 years ago

I wonder how long until we get Coins with RFID in them to verify etc. Certainly make checking and counting coins in shops much faster. Though they would probably be made out of a plastic by then.

nwh• 12 years ago

How do you know your coin isn't a duplicate of another? You'd need some sort of distributed consensus to allow you to independently verify its authenticity.

JoeAltmaier4• 12 years ago

So, how does this help now? I have a jar of coins (like 1M other people). If a grocer finds a coin that doesn't 'glow' right, either its counterfeit, OR I spent one from my jar. So what?

Or we all turn them ALL in for new ones by some switch-over deadline. And keep finding now-worthless coins in couch cushions, old jackets, bank boxes etc for a decade and going "Oh, dang!" Not popular either.

robin_reala3• 12 years ago

Cash drops out of circulation after a cut-off point in the UK. E.g. the current £20 note was introduced in 2007, and the previous one went out of circulation in 2010. If you want to use your coins you’ll have a grace period to exchange them.

JoeAltmaier4• 12 years ago

Talking coins here. They never go out of circulation. Can last decades, a century even. And a 'grace period' for coins is what I was getting at - they get stuck places, left for years. Billions will become worthless if there's a cutoff.

And further, coins are exactly that currency that's supposed to be intrinsically valuable! The founding myth was, they're precious metal and that's why they're tradable. A cut-off defies that myth. Unsettling.

mindslight2• 12 years ago

It would be easier and more foolproof to just make the entire coin from a substance that can't be easily created. For example it's really hard to transmute one chemical element from another, and many are rare, so why not pick one to use for coins?

sirsar• 12 years ago

Presumably because verifying the composition of the entire coin without destroying it is a very hard problem.

mindslight2• 12 years ago

Choose the element based on physical properties that are easy to non-intrusively verify - maybe the most dense, non-radioactive, malleable..

Joking aside, I once worked on a device to detect double-photon fluorescing marker that's probably similar to what they're using, once again aimed at anti-counterfeiting of various things. It's pretty neat to hit a substance with IR and have it glow green, and I haven't seen anything similar since. I still wonder how rare/common substances with this effect actually are versus their marketing spiel.

dhughes• 12 years ago

Casino chips use RFID chips and special edging as well as infrared marks.

Now one company wants to use plant DNA in a similar way as ISIS is used in metal coins. [2010] http://www.casinoenterprisemanagement.com/articles/october-2...

belorn• 12 years ago

What about diluted coins using the same fluorescent compound? Take a coin, extract the metal plating, and create 10 new coins.

How does the authentication in the new UK £1 coin work?

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