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					             SMART CARDS

     The Ultimate In Pocket Computers

              Mark E. Jenkins

Presented Nationally in Forensic Competition
       September 1985 to April 1986
         According to Christopher Evans in his book The Micro-Millennium, "Today, if the automobile
industry had developed at the same rate as computers, and in the same period, you would be able to buy a
Rolls-Royce for $2.75, and if your interested in miniaturization, you could place six of them on a
pinhead." Forty Years ago a computer would weigh several tons, cost hundreds of thousands of dollars
and fill many rooms this size. Today a computer with equal ability weighs less than an ounce, cost a
mere $5.00 and can fit easily into a billfold. This device is known as a Smart Card. This means in the
near future you may be using a Smart Card to do everything from storing information to keeping a full,
accurate, and secure method of financial transaction. In fact, so many businesses are sold on the idea,
that companies such as MasterCard and First Bank Systems are conducting field test across the country,
while many other companies have already begun to integrate the Smart Card into their daily business
routines. Paul Finch stated in Fortune, August 8, 1983; "In five years, everybody's going to be carrying
one of these." (show Smart Card) It is for this reason that it has become necessary for us to understand
the role the Smart Card is going to play in our lives. In order to develop this understanding, I will first
discuss what a Smart Card is and how it works. Then I shall discuss its applications. By doing so, you
will come to realize the scope of the Smart Card revolution in your life.

          According to Desktop Computing, August 1982, "The Smart Card is the ultimate in small
computers. Although dependent on a screen and keyboard for entering data, it has both computing
capability and the ability to remember everything that it does." What makes this possible is a silicon
chip as small as a dime, and as thin as tinfoil, when implanted in a card, it gives that card many of the
capabilities of a full-fledged computer. In order to see how the card works, we need to look at the chip
itself. (show chip) O.K., maybe a larger representation would be more helpful. (show V.A. 1) What we
can see here is that the chip is divided into five sections, a number of contact points, an input/output door,
a watchdog (or security section), a microprocessor and a memory. According to Mark Mills of the
Battelle Columbus Laboratories in Byte, January 1984, the contacts are the paths that the information uses
to enter and exit the card, while the I/O door regulates that flow. Yet entry into the memory is not
always that easy. Let's say you have private data stored in the chip, it may be necessary to protect access
to the memory. For this reason, Smart Cards have a watchdog. The watchdog monitors transactions
with the card. If someone attempts to access confidential data, the watchdog will request the user to
enter a Personal Identification Number (PIN). If the wrong PIN is entered three times, the cards memory
is erased. If the correct PIN is entered, the watchdog will allow access to the memory.

The memory of the card is what gives it the leading edge over current technology. According to Mills,
current credit cards can store only 212 characters on their magnetic stripe, or less than three typed lines of
data. While Smart Cards can store from 8,000 to 36,000 characters, or the equivalent of 12 pages of
single spaced typed data. The memory is also divided into three distinct sections. The free access zone,
which stores all public information such as identification, and a medical profile. The medical profile is
stored here in case you would be in an accident. This allows the emergency room doctors instant access
to information that could save your life. The confidential zone stores all financial information. This is
because this area is protected by the watchdog, and information can only be read with your permission.
The secret zone stores all the programming of the chip and your PIN. This zone can never be accessed
after manufacture for the security of the card.

        Finally, the microprocessor gives us the ability to do more than store information. The
microprocessor computes interest, calculates balances, and encrypts data. This means that vital data can
be stored in code, and is only decoded by the microprocessor when the watchdog verifies the user's PIN.

        Now that we have some understanding of what a Smart Card is, and how it works, we can explore
two of the applications of this new technology. These two areas are data storage and finance.
          Every one of us is carrying many different types of data carriers with us at this very moment.
Whether we know it or not, everything from our drivers license to our car or apartment keys are
considered data storage devices. And thus, all of these are targets of the Smart Card industry. One of
these companies is DataKey, Incorporated. As the name suggest, they produce keys with computer
circuitry. At first sight the DataKey looks like a black plastic replica of just any key. (show key) Yet
within the DataKey is the capability to consolidate your entire keychain into one plastic key. According to
John Underwood, President of DataKey, in a personal interview August 12, 1985, the memory of the key
will make it possible to use the key for numerous situations and devices. This is because the key's
memory will remember what areas you are allowed access to. This way two different keys may allow
access to an office, but only your key will allow access to your home or car. This new key system also
allows a company to protect against stolen keys by having that keys number black-listed in the key
receptacles computer memory. Thus the user does not have to recall all keys for security reasons, only
tell the receptacle which keys not to accept. Now while DataKey hopes to replace your keychain with a
DataKey, other companies are attempting the same maneuver on your wallet.

         Since Smart Cards can store data securely, the storage of drivers license, medical profile, social
security and passport information in a card is an easy task for Smart Card companies. In fact, the July
1985 issue of Popular Science claims "All the information in your wallet could be stored in that one piece
of plastic." Yet data storage is not the only task your Smart Card can perform.

According to U. S. News and World Reports October 3, 1983, "A single card could do multiple duty as a
credit card, a debit card, an access card to automatic teller machines, and a telephone credit card." The
financial applications of the Smart Card can be as simple as a debit card which merely deducts
transactions from its memory. An example of this is the French Telecarte. (show telecarte) The
telecarte is a phone debit card. Each card is programmed to store forty units of telephone capability.
You just insert your card into a modified pay phone. Depending on the distance and duration of the call, a
given number of units are deducted from the cards memory. When the card is empty, it can be refilled
with the original forty units, or simply dis..carded.

        The financial applications of the Smart Card may be as intricate as an entire financial portfolio.
According to Arlen Lessin, President of SmartCard International, in an Associated Press release May 10,
1985. "One card could carry the records of several bank and credit card accounts, putting an electronic
financial registry in your wallet." Because the card has both computing and memory ability, it can store
information on many different accounts while keeping each separated from the other. This means that
your Sears, Diners Club, MasterCard, your savings and checking accounts, and your Automatic Teller
Machine card will all reside in one card, all separate, and all secure. Russell E. Hogg, President of
MasterCard International stated in The American Banker on February 22, 1985 that "We have not seen
anything that has as bright a future as the chip card."

         Now that we know what a Smart Card is, how it works and some of its applications, we will be
better prepared for the change it will bring to our lives. And as Jerry Svigalls, Development Manager for
IBM, told me recently, the people who are aware of the Smart Card now, will have a headstart on the rest
of society when the card strikes the market full force. As Arlen Lessin points out in French American
Commerce, Fall of 1983, "Microcard transactional technology is no longer a dream. The era of the
Smart Card is about to shape the daily lives of all of us."

(for a picture of V.A. 1, please see Byte January 1984)