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RFID technology has been widely used in logistic, automation and authentication applications. It still has many potential issues of privacy and security. We present a novel XTEA encryption based authentication protocol. Analysis of its security and privacy is performed using FPGA based prototyping. Different attack models are implemented, and the results show that the protocol is robust and safe against major attacks. The protocol is analyzed and compared with other two similar protocols, Analysis of its performance as compared to related works show its advantages in code size, clock cycle, communication cost and scalability.