No matter the culture or timeframe currency has always been illegally copied while trying to stay ahead of the counterfeit money detection methods of the time. It seems so easy that every child born after the date of Xerox machines had the bright idea to spend a nickel to copy a dollar. The brightest of us even copied both sides of the bill and carefully taped it together. While this may seem silly it isn't too far off from how it used to be done by replacing Xerox machines with hand-carved printing plates.
Counterfeit Attempts Through History
Colonial America was a counterfeiters dream once the Revolutionary War began. To fund the war against the British the fledging American government introduced their first paper currency. These bills were call Continentals and were about as basic a bill as possible. In fact they were only printed on one side and since there was no unified design each colony had their own design. What chance did a shop keeper have when there is a glut of new currency at once with multiple designs and no information. Since printing at the time was crude all it took for a counterfeiter to fake the bills was to carve the pattern on a wooden press and begin building their wealth.
Not only was the Continental easy to forge, the British took to hiring these men to churn out as much currency as possible in an attempt to destroy any value the bills may have. While the British lost the war they did succeed in killing the Continental's viability. Estimates are that by the end of the war that nearly half of all American currency was counterfeit.
A few years after the war Congress officially made the dollar the currency of the United States. However, banks were being given permission on the state level to print their own currency called bank notes. It got so out of hand that at the peak there was an estimated 7,000 different viable currencies. No individual could be knowledgeable of every single bank-note variation which made this a glorious time to be a counterfeiter. It had gotten to the point where they could practically make up their own bank notes and still have them be accepted.
Previous Forms of Counterfeit Detection
In 1861 the United States government took their first serious step toward fighting counterfeiting. Having realized the serious issues plaguing their currency they announced a single currency for all of America. The Civil War needed to be funded so the new bills, nicknamed Greenbacks, had two main forms of counterfeiting deterrents. The first was the complex design. Detailed weaving and intricate artwork made it very difficult for people to copy the plates. At this point the plates still needed to be carved by hand out of wood. Only the best of the best could manage to accurately copy the design. The second deterrent was the paper it was printed on. Rather than use whatever paper was lying around they had used a special type of material that was very difficult to copy and made a legitimate bill easier to detect simply by the feel of it.
Modern Day Counterfeit Detection
We live in an age of high quality printers and instant scanners. With the amount of detail we can copy from a dollar bill in ten seconds it would be assumed that counterfeit money would be at an all time high. However, the government has largely gotten in front of the counterfeiters in the age-old back and forth struggle between the two parties. The way they have gone about making the dollar harder to fake is to make it an increasingly more complex bill.
Colored fibers: The dollar is printed on something that is fabric and not paper. By weaving a few strands of blue and red into the material it makes a fake dollar easier to detect with the naked eye.
Multi-colored printing: You can get more depth out of a picture by using even slightly different colors for better contrast. Most printers are not able to match the vibrancy of a legitimate bill and look flat and muddy.
Embedded security strips: Inside most modern bills is a small plastic strip that denotes what type of currency should be on the bill. This makes the already difficult material even harder to accurately copy.
Counterfeit Detector Pen: If you've ever paid with a twenty-dollar bill at the store, you likely saw the cashier take out a pen and draw on the bill before tucking it away in the drawer. While you might think this is a highly advanced pen all it really does is leave a bit of iodine on the bill. The reason is that iodine will not react with a legitimate bill outside of a light mark. If you were to try it on a counterfeit bill, than the iodine would react with the starch in the paper and leave a black line. It is such a simple tool that it takes no real training to have every customer facing position be an active counterfeit money detection expert.