In their statements Adobe flacks suggest that the technology is some kind of super-secret voodoo, but the reality is much simpler: digital watermarking. Regular old currency readers or software found in ink jet printers, change machines and photocopy machines is made by Japanese company Omron. Omron says it uses "fuzzy logic". The idea is that the image is averaged repeatedly and then a score is generated. If the score is higher than a threshhold then the match is made. The problem with this approach is that it is processor intensive.

Digital watermarking requires the cooperation of the document generator, in this case central banks. The banks print a distinctive pattern on their notes which the software recognizes. It can do this much faster than generic averaging. The libraries used in Adobe's software are written by Digimarc, an Oregon-based company. One of the patterns used is a constellation of five one millimeter circles. You can see the circle constellations on the reverse of the new US twenty dollar bill and many European notes.

In the press statements this technology is presented as coming from the so-called "Central Bank Counterfeit Deterrence Group". This group is sponsored by the European Central Bank.

The willingness of companies to be awed when gun-toting federal agents walk into their offices is aptly demonstrated by the way Adobe has rolled over for the government. Particularly disturbing is the way they kept this effort secret from their customers. The debacle illustrates the tendency of private companies to betray their customers and become an arm of the government when they are approached by authority even without any legislative backing. In many cases the bank and treasury officials who promote efforts like this are self-interested Oliver North-style juntas who have no legislative or representative backing whatsoever, yet are able to coerce large companies into doing their bidding.

Think twice before buying Adobe.