From the state department
An Electronic Passport is the same as a traditional passport with the addition of a small integrated circuit (or “chip”) embedded in the back cover. The chip stores:
The same data visually displayed on the data page of the passport; A biometric identifier in the form of a digital image of the passport photograph, which will facilitate the use of face recognition technology at ports-of-entry; The unique chip identification number; and A digital signature to protect the stored data from alteration.
What are the special features of an Electronic Passport?
The special features of an Electronic Passport are:
Securely stored biographical information and digital image that are identical to the information that is visually displayed in the passport; Contactless chip technology that allows the information stored in an Electronic Passport to be read by special chip readers at a close distance; and Digital signature technology that is used to verify the authenticity of the data stored on the chip. This technology is commonly used in credit cards and other secure documents using integrated circuits or chips.
As to reading it open or closed:
“Skimming.” We use an embedded metallic element in our passports. One of the simplest measures for preventing unauthorized reading of e-passports is to add RF blocking material to the cover of an e-passport. Before such a passport can be read, it has to be physically opened. It is a simple and effective method for reducing the opportunity for unauthorized reading of the passport at times when the holder does not expect it.
As to just transmitting a number that links to a database, that is also not the case, it was built in so that you could not be tracked by such a number:
“Tracking.” A chip that is protected by the BAC mechanism denies access to its contents unless the inspection system can prove that it is authorized to access the chip. However, these chips still allow the Unique Identifier (UID) to be communicated with the reader, which could theoretically allow the document bearer to be “tracked.” To prevent the use of the UID for “tracking”, we use a Random UID feature. A RUID presents a different UID each time the chip is accessed. In order to be considered random, the e-passport must present an RUID that cannot be associated with UIDs used in sessions that precede or follow the current session. Each chip uses its onboard hardware random number generator (RNG) module, thereby utilizing a true RNG base to derive a RUID.