I got off work the other day and got in my car, went to start it up and nothing happened. later on i noticed the security light was staying on, i tried cleaning off the contact on the key (on that chip looking thing). Anyways later on the light went off and it started. Could this thing on the key be going bad?

 

Could be, or it could be the ignition lock that reads the key's resistance, or it could be a flakey VATS module.