In definition digital counterfeiting is the use of computers or digital equipment to make counterfeit copies of printed resources. The major example of counterfeits is currency which according to the U.S. Secret Service around 60% of currency made counterfeit is done so digitally. Other counterfeit items also include business checks, collectibles, fake identifications, and credit cards. The practice of counterfeiting is illegal in the United States and offenders could be sentenced to 15 years per offense. The majority of counterfeit currency are produced by gangs, organized crime, and terrorist organizations but has also been seen done so by college students and even high school students. Although easily detectable counterfeit currency has had more ease of creating due to more and more digital technology that allows to do so.
In order to prevent currency counterfeiting, the Government has been implementing measures such as changing the currency design every 7 to 10 years. With each new edition they are incorporating additional security features (watermarks, microprinting)which make it hard to duplicate the bills and can be easily seen when holding the bills up to the light. Also, in order to make it easier to track the source of the counterfeit item, the digital imaging equipment(copiers, scanners)are equipped with technologies such as printing invisible code that make tracking possible.Cannon has revealed to be using such technologies since 1992. Source - Understanding Computers: Today and Tomorrow, 13th Edition
The use of digital watermarks is incredibly popular and most often people have no idea when something actually has a digital watermark. Digital watermarks are used to identify whether or not a document has been tampered with, protect sensitive material from unauthorized editing and to deter things like counterfeiting and piracy. The process of digital watermarking involves embedding digital information or identifiers into audio, video and printed materials. The digital watermark, while undetectable to people can easily be identified and analyzed by computers. http://www.digimarc.com/technology/about-digital-watermarking
One digital counterfeiting prevention tool is a security thread. A security thread is a plastic strip that is embedded in U.S. currency. This strip can only be seen when it is held up to the light or when placed under an ultraviolet light. When you make the strip visible, it shows the letters USA followed by a number. The number is the value of the bill. For example a one dollar bill will have "USA 1" printed on the security thread. This feature makes currency hard to duplicate but not impossible. Some counterfeits have been known to have a thin grey line printed on the end of the thread or a varnish at the end.