How to generate and validate a software license key?

Question

Caveat: you can't prevent users from pirating, but only make it easier for honest users to do the right thing.

Assuming you don't want to do a special build for each user, then:

• Generate yourself a secret key for the product
• Take the user's name
• Concatentate the users name and the secret key and hash with (for example) SHA1
• Unpack the SHA1 hash as an alphanumeric string. This is the individual user's "Product Key"
• Within the program, do the same hash, and compare with the product key. If equal, OK.

But, I repeat: this won't prevent piracy

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I have recently read that this approach is not cryptographically very sound. But this solution is already weak (as the software itself has to include the secret key somewhere), so I don't think this discovery invalidates the solution as far as it goes.

Just thought I really ought to mention this, though; if you're planning to derive something else from this, beware.

There are many ways to generate license keys, but very few of those ways are truly secure. And it's a pity, because for companies, license keys have almost the same value as real cash.

Ideally, you would want your license keys to have the following properties:

1. Only your company should be able to generate license keys for your products, even if someone completely reverse engineers your products (which WILL happen, I speak from experience). Obfuscating the algorithm or hiding an encryption key within your software is really out of the question if you are serious about controlling licensing. If your product is successful, someone will make a key generator in a matter of days from release.

2. A license key should be useable on only one computer (or at least you should be able to control this very tightly)

3. A license key should be short and easy to type or dictate over the phone. You don't want every customer calling the technical support because they don't understand if the key contains a "l" or a "1". Your support department would thank you for this, and you will have lower costs in this area.

So how do you solve these challenges ?

1. The answer is simple but technically challenging: digital signatures using public key cryptography. Your license keys should be in fact signed "documents", containing some useful data, signed with your company's private key. The signatures should be part of the license key. The product should validate the license keys with the corresponding public key. This way, even if someone has full access to your product's logic, they cannot generate license keys because they don't have the private key. A license key would look like this: BASE32(CONCAT(DATA, PRIVATE_KEY_ENCRYPTED(HASH(DATA)))) The biggest challenge here is that the classical public key algorithms have large signature sizes. RSA512 has an 1024-bit signature. You don't want your license keys to have hundreds of characters. One of the most powerful approaches is to use elliptic curve cryptography (with careful implementations to avoid the existing patents). ECC keys are like 6 times shorter than RSA keys, for the same strength. You can further reduce the signature sizes using algorithms like the Schnorr digital signature algorithm (patent expired in 2008 - good :) )

2. This is achievable by product activation (Windows is a good example). Basically, for a customer with a valid license key, you need to generate some "activation data" which is a signed message embedding the computer's hardware id as the signed data. This is usually done over the internet, but only ONCE: the product sends the license key and the computer hardware id to an activation server, and the activation server sends back the signed message (which can also be made short and easy to dictate over the phone). From that moment on, the product does not check the license key at startup, but the activation data, which needs the computer to be the same in order to validate (otherwise, the DATA would be different and the digital signature would not validate). Note that the activation data checking do not require verification over the Internet: it is sufficient to verify the digital signature of the activation data with the public key already embedded in the product.

3. Well, just eliminate redundant characters like "1", "l", "0", "o" from your keys. Split the license key string into groups of characters.

Simple answer - No matter what scheme you use it can be cracked.

Don't punish honest customers with a system meant to prevent hackers, as hackers will crack it regardless.

A simple hashed code tied to their email or similar is probably good enough. Hardware based IDs always become an issue when people need to reinstall or update hardware.

Good thread on the issue: http://discuss.joelonsoftware.com/default.asp?biz.5.82298.34

When generating the key, don't forget to concatenate the version and build number to the string you calculate the hash on. That way there won't be a single key that unlocks all everything you ever released.

After you find some keys or patches floating in astalavista.box.sk you'll know that you succeeded in making something popular enough that somebody bothered to crack. Rejoice!