RFID is short for Radio Frequency IDentification. There is a tiny transmitter, about the size of a grain of rice, embedded in the chip. Each transmitter sends out a unique signal that identifies the object. This allows receivers located nearby to figure out what is going on. Like how many chips does this player have or did the dealer make the right payoff. RFID is used in many products these days, like EZ-PASS for paying highway tolls on the east coast and Exxon's SpeedPass for paying for gas at the pump instead of using a credit card. The RFID transmitters cost about 10 cents each right now and the industry expects to drive the cost down to a penny each in the near future. At the point the technology will become pervasive. Supermarkets will put them on every item in the store. You will be able to walk out of the supermarket, passing by a receiver, and have your items paid for and a receipt printed without ever removing an item from the cart. Great stuff. Here is a picture of a sample chip I got from a salesman.