Enchanted Coins

Inspired by Hermione Granger (who distributes magically enchanted coins to the members of a secret society in Harry Potter and the Order of the Phoenix), someone has been passing technologically enhanced Canadian coins to United States defence contractors. [ABC Money, Yahoo]. Or perhaps not [Globe and Mail].

The coins (dubbed "spy coins" by some journalists) contain tiny transmitters, and we may guess they are intended for something to do with espionage or surveillance.

Bruce Schneier thinks the story sounds implausible. "There are far easier ways to track someone than to give him something he's going to give away the next time he buys a cup of coffee. Like, maybe, by his cell phone."

But Bruce's criticism makes three questionable assumptions.

Firstly, it assumes we know exactly what the other side wants to track. [Note 1] Maybe they want to find out whether the coins are spent on coffee or cocaine. Maybe they want to track the circulation of hot money. [Note 2]

Secondly, it assumes that the coins were deliberately planted on the defence contractors. Maybe the real espionage targets had already spent the coins in the coffee shop, and the defence contractors merely chanced to receive the coins in their change. [Note 3]

And thirdly it assumes that there is a relatively small number of these coins. But if there were millions of these spy coins in circulation, it wouldn't matter if some of them were spent in coffee shops.

Meanwhile, what is the purpose of publishing this story in this form? One effect is that patriotic US citizens will get the message that Canadian coins (like Canadian drugs) are to be distrusted. Obviously the bad guys wouldn't dare to doctor US coins would they?

Note 1. Bruce is assuming the purpose and then evaluating whether a given mechanism will satisfy this purpose. The POSIWID alternative is to infer the possible purpose from the likely effects of a given mechanism. In other words, reasoning in the opposite direction.

Note 2: A Nonny makes a similar point. "RFID tags in coins is a stupid way to spy. It is, however, an excellent way to track currency (especially through vending machines and the like). Everything that makes it a weak spy tool makes it a good tool for a mint that is trying to assess coinage usage patterns." clvrmnky disagrees. "I seriously doubt Canada would spend the time and money coming up with tech to track currency usage. They already know how currency is used." This disgreement yields another example of the different kinds of reasoning discussed in Note 1.

Note 3: Perhaps defence contractors have exceptional capability for detecting unusual coinage. Or perhaps the coins were detected when they entered a secure facility. Defence contractors therefore serve as markers for the population as a whole.