Hi Kevin,
Hardware based keys are keys that use your CPU identification number as 
part of the encryption/decryption for the key. In theory each number in 
the CPU identification number will select a certain part of the end 
product key.
  For example, if you had a CPU identification number like 8125. The 
number 8 might generate some letters and numbers like jmfxz8. The 1 
might generate qx9mf. The 2 might generate m7lgnx. The 5 might generate 
y85gnz.. Ok, you put that together and you get a 16 character product 
key that uses 8125 to create and compare the key to your CPU. If the 
product key you enter into your game does not match the CPU 
identification number the game lets you know the key is not valid. 
However, if the string of letters and numbers match up to the key 
created by your unique CPU identification number the program gets 
registered. That is the technique of making hardware based keys.
Smile.


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