Counterfeit currency is fast becoming a major problem in our country. Although currency forgers have a number of technologies at their disposal, we could trip them up by just using our cell phones and some cryptography.

I told my father that QR codes couldn’t help much in this case because it would be easy for a counterfeiter also to reproduce them. However, it might be possible to machine-analyse the note through a phone camera and detect those intricacies of the lithograph (for instance, a particular mark on Gandhiji’s nose) that are difficult to spot for a common person but are easy for a machine to close in on several parameters. The photograph could be taken in any orientation. I experimented right away with my phone camera but found that without the close-up mode (available in many phone cameras), it was impossible to get images with the resolution and clarity that could serve the purpose. Perhaps it could be done with a lens adapter fitted to the phone camera.

The power of cryptography

I read up what I could find about fake currency notes in India, and was shocked to discover the extent of the menace and the problems it has caused to innocent people. A CBI (Central Bureau of Investigation) director stated in 2006 that 1.7 trillion rupees of fake currency notes are in circulation. Such is the fear of counterfeit currency that there are parts of the country and Nepal where no one will accept a Rs 500 note—it is even feared that ATM machines are disbursing fake currency notes. A conservative estimate puts the total counterfeit currency in circulation in this country at Rs 1500 crores.

We have so far not been able to do much about this menace, but there is now a possibility of tackling the issue head on.

{quotes}What if we insert a cryptographic code (a short number) along with a serial number in every printed currency note of higher denomination? Cryptographic codes (hash codes, etc) are a unique mathematical invention, the nature of which makes it impossible for anyone to tamper with them.{/quotes} They are used in many security applications such as digital certificates, specifically for this reason. Cryptographic codes are available in many schemes and algorithms, and are used depending on the nature of the application. Cryptographic codes involve computations and hence can be verified only electronically. That is why no one would ordinarily think of inserting cryptography codes into currency notes to certify their authenticity.

But with one in every two adult Indians equipped with a mobile phone today, everybody can just pick up their phones and SMS the serial number of a currency note to a toll-free number. A calculated cryptographic code and the currency denomination can then be sent back to them instantly over SMS. If the code matches what is on the note, the note is genuine. If the note is fake, a wrong serial number will be revealed to the system, and the currency holders can be advised about their next course of action.