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this post was submitted on 09 Apr 2024
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If the key is in the same device that's being used to access a protected resource over the network, the thing can be potentially be hacked and the key retrieved.
That's why there are solutions were the key never leaves a secure hardware device, such as challenge-response authentication were a bank card's smartchip is used to generate responses to the challenges (with the key never being outside the card) or keydongles that show a variable code, depending on time.
This is actually pretty old tech.