I don't want to jump in on the "how secure is my phone discussion", I just wanted to point out that with all the revelations and concerns regarding privacy, a single company having fingerprints for some significant portion of North America is nothing to be taken lightly.

That said, I sincerely doubt this is the case. I imagine the phone acts as a proxy for the authentication, validating the fingerprint then sending some other form of authorization to Apple or using the fingerprint as input to a cryptographic algorothm.

We don't really know exactly what it stores, but they claim it's a hash of the fingerprint. That is not the same as the actual fingerprint at all, and it should be unusable outside the iPhone 5S ecosystem. I would imagine this hash, is also what they send to the servers to authenticate, but time will tell.

If they send a hash to servers, that still has privacy implications. Apple could build a searchable database of those hashes, and the government could issue subpoenas to search that database for particular fingerprints. Maybe that's not such a bad thing, because it could help to solve crimes, but it's worth thinking about.

That's an awful idea. The potential for false positives is significant, since fingerprints are not 100% accurate identification method.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3093498/ states that even professional forensics required independent verification to eliminate false positives.

The hashes, whatever they are, will not be "binary" in their nature. Matching against a range of visual characteristics requires to allow some level of fuzziness. Even assuming that near future improvements bring the false positive rate to half of that of the best forensic experts (to 0.05%), the law of large numbers guarantees that innocent people will be caught up in investigation dragnets. Just imagine the lives destroyed by these kinds of clerical errors.

The above is the same reason I'm against our national law enforcement getting access to the passport biometric databases. Even discounting the potential for abuse: once the police have a suspect with "matching" fingerprint available, they will have less incentive to find other ones.

It's a shame really, because all evidence is fuzzy on some level. DNA could be planted, videos can be a of a lookalike, or being at a particular location at a particular time could be a coincidence. I don't know exactly how law enforcement works, but they really should be looking for connections and try to explain why a suspect is not the right guy, instead of the other way around. Maybe that is just wishful thinking.

I remember reading (but can't find the source, I think it was Anand) that they store a hash of the fingerprint data and a unique identifier of the phone.