This is 7 pixels tall by 7 pixels wide and symmetric meaning you have 28 independent bits and 12 bits for the color I'm guessing. This adds up to 2^40 possible images.

Generating 2^40 of these seems pretty feasible. Is there a chance a malicious entity could pretend to be someone else?

There are 2^160 possible Bitcoin addresses. If you make it so each square is either one of 31 colors or off, then you have 5 bits per block. Along with that, make it 9x5 and symmetrical so you have 4x5 unique squares. 2^(5*32) = 2^160.

Basically the solution is to give each block a unique color. With this fix, you could allow addresses to be scanned by smartphone apps without even requiring a link back to the address hosted on your website.