Incredibly, the activation algorithm for Windows XP has finally been completely cracked, allowing for totally offline activation, according to Register (through Ars Technica). TO blog post on tinyapps covered a Reddit post discussing itbut the program that enables it has apparently been around for at least several months, possibly floating in the ether as a torrent download.
As for who created the software, no one on the subreddit post knows, including retrospective user reviewwho first shared it and not even sure where they got it, speculating it came from a stream somewhere.
In the meantime, it seems that someone is working on reverse engineering the software. A user calling himself Neo-Desktop posted the program on Github and said in a discussion there they are working to create an open source version.
