Magnetic card reader system

A magnetic card reader system comprising:

• a magnetic card reader including a magnetic head that reads predetermined data from a magnetic card storing the data;
• and a computer connected with the card reader, characterized in that:
• the magnetic head comprises a core including a coil that converts data stored in the magnetic card into an analog signal, an A/D conversion chip that is connected with the coil and converts the analog signal into a digital signal, and a digital IC that is connected with the A/D conversion chip;
• and
• the computer and the digital IC have mutual authenticating means for authenticating each other, and the digital IC executes encrypting means for encrypting the digital signal by using a key stored therein and transmitting means for transmitting the digital signal encrypted by the encrypting means to the computer and the computer executes decrypting means for decrypting the encrypted digital signal by using a key stored therein after the computer and the digital IC determine that a mutual authentication result obtained by the mutual authenticating means is valid, wherein a hashed output value obtained by hashing a predetermined initial value by using a predetermined one-way hash function is used as the second key generated by the key generating means, and a hashed output value obtained by using the one-way hash function to hash a hashed output value as a previous key hashed by the one-way function is used as each of the third to nth keys generated by the key generating means.