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=== Hardware (USB) vs. Software (Digital File) ===
The advantage of a hardware (USB) lock is that it is portable and not tied to a specific computer. You can unplug it and plug it into another computer. A software lock is tied to a specific computer and cannot be moved once bound to that computer. ThisThe alsoadvantage meansof a software lock is that ifit thecan be installed on a computer changesthat substantially,you thedon't lockhave mayphysical becomeaccess invalidto, and mayit needdoesn't replacement.require a free USB port.
This is especially relevant if you install the lock on a virtual machine (VM), since migrating the VM or rebuilding it can cause the lock to become invalid. Specifically, if you run a VM in the cloud as a licence server, you need to keep in mind that stopping and starting the VM is safe, but only retaining the physical storage and basing a new VM on it will invalidate the licence.
The advantage of a software lock is that it can be installed on a computer that you don't have physical access to, and doesn't require a free USB port.
=== Local vs. Network ===
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