It's an interesting idea, but much discussion over the past couple of years seems to indicate that it is not totally feasible. I have had an interest in obfuscating source code in the past, and in a way I still do, as I have a commercial product (Win32 Perl/Tk) which my client would like to protect. Right now we use PerlAPP from ActiveState to package the thing into a single exe file, and we have a DLL of our own which contains some encrypted information.
We also have a fairly sophisticated authentication and registration mechanism, and the logs have shown us that while people certainly try to authenticate the one copy a number of times, no-one has yet succeeded. I doubt it is through lack of ability, but more because the people wanting bootleg copies just won't pay the hackers enough for them I suspect.
Maybe if we had a killer app that was wanted by hundreds of thousands of users, the situation might be different. But right now it is hard for me to justify spending what might turn into tens of thousands of dollars of development time, placing us in a proprietary environment with all the maintenance headaches that would involve, to prevent a few $1500 thefts.
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