Software licence keys are used in various copy protection schemes. The basic idea is that only users that have acquired the appropriate licence will be issued with a licence key enabling them to install or use the software. From a software developer standpoint, the purpose of a software licence key is to prevent the developer’s software from being copied, shared or otherwise illegally used (aka pirated) by non-licensed users. License keys are typically created and delivered via a license generator once a software user has paid for the software and has agreed to the terms and conditions set out in the End-User License Agreement.

A software licence key, (also known as a product key) certifies that a copy of a program is original. It is usually a unique string of numbers and characters, and online activation or ‘calling home’ is often required in order to verify that two identical product keys are not being used at the same time. However, a software key can also be a USB or hardware dongle that physically connects with the computer and one of the few advantages of using this type of hardware key is that it can be used without an internet connection.

A software licence key is a pattern of numbers and/or letters that is given to an authorized purchaser. When entered by the user during the installation of computer software, the key unlocks a software product and makes it available for use. Product keys are somewhat inconvenient for end users. Not only do they need to be entered whenever a program is installed, but the user must also be sure not to lose them. If a user does a complete reinstall of the software on their PC, they will need the product licence keys (or serial/registration information) for the software that they have paid for. Loss of a product key usually means that software is useless once uninstalled. In some instances, this can result in a significant financial loss.

The overall effectiveness of licence keys in enforcing software copyright has also been criticised. Software protected by a software licence key is still vulnerable to unauthorized use and often programs can be patched to bypass the licence check. A separate class of software apps known as keygens (short for key generators) have also been created with the purpose of bypassing the legal product registration and licence key activation process by generating counterfeit licence keys.

Software licence keys are designed to regulate the use of priced licensed programs. One common misconception about software licence keys is that the key is the licence. Strictly speaking, the licence is the rights granted to the user of the software and the licence key is simply a token that verifies the user as a legitimate paying customer.

There are more effective ways to limit software piracy than with software protection keys. The emergence of cloud computing systems has created more reliable ways for software developers to licence their software.
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