The chip is made out of inert materials, and has no power source,
it is ectronically inactive until activated by the scanner.
Then it returns to its inactive state once scanned.

Encoded on a the chip is a specific code number unique to the pet which is registered along with details of it's breed, sex, age and most importantly the owners name, address and telephone numbers.  

Information on the microchip is read with a special scanner.