The team, led by associate professor Rajesh Menon from University of Utah in the US, found a way to create inexpensive full-colour 2D and 3D holograms that can be viewed at wider angles than current holograms.
The applications for this technology could be wide- ranging, from currency and identification badges to amusement rides and advertisements.
"You can have rich colours at high efficiency, with high brightness and at low cost. And you don't need fancy lasers and complicated optics," Menon said.
Therefore, there is a lot of wasted light. With a typical LCD projector, for example, you may only see as little as 5 per cent of the total light at one time.
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Scientists have discovered a better way that borrows from the same principle behind how wings of certain butterflies display their colours.
Using sophisticated algorithms and a new fabrication method, the engineers can create holograms that do the same thing - redirect colours to appropriate locations - instead of absorbing most of it to project much brighter photographic images either in 2D or 3D and with full, natural colours.
Currently, full-colour holograms require lasers to not only make them, but also to view them. Menon's holograms can be viewed with regular white light.
Such technology could be used on currency notes with security holograms that produce more lifelike images.
It also could be used for identification badges, driver's licenses and security documents like passports in which an officer could use just a flashlight to authenticate it instead of a special light such as an infrared scanner.
Researchers have only produced 2D still images with their technology so far, he said it wouldn't be difficult to take the next step to create full-colour 3-D moving images similar to the holographic chess pieces in the movie Star Wars.