License keys are the defacto-standard as an anti-piracy measure. To be honest, this strikes me as (in)Security Through Obscurity, although I really have no idea how license keys are generated. What is a good (secure) example of license key generation? What cryptographic primitive (if any) are they using? Is it a message digest? If so, what data would they be hashing? What methods do developers employ to make it difficult for crackers to build their own key generators? How are key generators made?
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One solution that should give you these would be to use a public key signing scheme. Start with a "system hash" (say grab the macs on any NICs, sorted, and the CPU-ID info, plus some other stuff, concatenate it all together and take an MD5 of the result (you really don't want to be handling personally identifiable information if you don't have to)) append the CD's serial number and refuse to boot unless some registry key (or some datafile) has a valid signature for the blob. The user activates the program by shipping the blob to you and you ship back the signature.
Potential issues include that you are offering to sign practically anything so you need to assume someone will run a chosen plain text and/or chosen ciphertext attacks. That can be mitigated by checking the serial number provided and refusing to handle request from invalid ones as well as refusing to handle more than a given number of queries from a given s/n in an interval (say 2 per year)
A good software license key/serial number generator consists of more than just a string of random characters or a value from some curve generator. Using a limited alphanumeric alphabet, data can be embedded into a short string (e.g. XXXX-XXXX-XXXX-XXXX) that includes all kinds of useful information such as:
However, despite being broken up into steps, this falls prey to the same methods of cracking used for the normal process. The process used to create an activation key that is checked against the original CD key was quickly discovered, and generators that incorporate both of the keys were made.
Most secure schemes involve either the user providing the software supplier with some details of the machine which will run the software (cpu serial numbers, mac addresses, Ip address etc.), or, require online access to register the software on the suppliers website and in return receive an activitation token. The first option requires a lot of manual administration and is only worth it for very high value software, the, second option can be spoofed and is absolutly infuriating if you have limited network access or you are stuck behind a firewall.
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