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Actually, I saw a rather interesting homemade protection a few months ago. The author had the registered features inside of an encrypted dll. A valid license key contained the decryption constant/password to decrypt the file for registered use. Something like this is actually free to implement and would stop crackers in their tracks until they managed to acquire an original license key.
With software protection, you often need to weigh the inconvenience that your licensing scheme creates against the usefulness and convenience that your software provides to the user. If your software is an essential asset to a company or user, they will not mind the inconvenience of hardware locking or dongle use since your application may be the core of their business. However, if your software is only moderately used/nonessential, and there are a lot of other competing products, such inconvenience of your licensing scheme may cause the user to shy away from your application, buy from another company, or simply live without your software. Unless your software is genuinely innovative and can truly be considered an asset to the owner or business, people may shy away from complicated protection.
While naturally, we want to deter our application from being cracked or pirated, we should not always do this at the expense of the legal user. I have a software product that I had to make this decision with myself. I never wanted to limit or inconvenience the end user with a complicated protection. I know as a result that some more skilled crackers would likely be able to crack my application. This does not bother me though since I know that my legitimate customers will be happy with my product.
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"As the island of our knowledge grows, so does the shore of our ignorance." John Wheeler
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