Several elements of counterfeit deterrents in the redesigned Series 1996 U.S. banknotes depend on photonics, starting with process control. These include manufacture and position of the security thread (a thin ribbon running through a banknote substrate), quality control of the watermark (the image formed by varying paper density in a small area during the papermaking process that shows up as darker and lighter areas in transmitted light), and the optically variable ink used in printing the bills. Faced with thwarting the relative ease of counterfeiting holograms used on credit cards, researchers have turned to measures for encrypting data that cannot be seen and cannot, therefore, be copied by an intensity detector such as a CCD camera. A scheme of complex optical phase/amplitude patterns is used to permanently and irretrievably bond a phase mask, or a code, to a primary identification amplitude pattern such as a fingerprint, a picture of a face, or a signature. The biometric system can positively identify a person by recording and comparing unique personal characteristics. The system can run the gamut from face recognition to retina scanning and iris scanning. Other security applications of photonics are also described, including the prevention of clothing theft and the prevention of the counterfeiting of designer goods, electronics, videos, compact discs, automobile parts, books, software, and liquor. 11 figures