The tutorial is here:
http://www.ebookapprentice.com/sell/cbpassword/I am not sure why the URL didn't come in my previous point
The point is there are 2 elements:
(i) Which password from the pool a particular person needs
(ii) What that particular password is
The user can't control (i)
For example, if Alice downloads the book and needs password #37, you give it to her. Now Bob downloads and needs password #142. Now if Bob asks Alice for a password, the only one she knows is #37, so it doesn't allow Bob to cheat.
While it is true if enough people got together and shared their particular passwords as they got them, e.g. Alice posts password #37, Bob posts password #142, etc. Provided you have a reasonable number of passwords this isn't likely to happen...
First you need a lot of cheaters to get together. This is unlikely in itself, as the first few hundred or thousand cheaters get nothing by helping others cheat
Also in my experience most people won't cheat, so before you get a total of 1000 cheaters, you probably need many times than number of customers.
Second if say 1000 cheaters do get together and share their passwords for the next 1000, by then you will have sold a 1000 copies. By which time you have a healthy profit, and should be able to afford a lawyer to get them shut down
As you have a record of who bought which passwords (assuming you keep some kind of logs or records), you have all the names of the initial cheaters, should you need it.
Fourth, you can wreck their scheme at any time you like, but making a new set of passwords (in a new version of your book) whenever you want.
As I say, most people don't cheat and won't want cheat you in any case. This is even more true if you also:
(a) You don't cheat them, and always treat them fairly (so they can't justify it to themselves)
(b) Make it easier not to cheat
(c) Try to add some level of deterrent to cheating (e.g. copyright notices) and/or add some incentives for acting properly (e.g. bonuses, updates, etc)
The technical things like passwords are there to help you do these things, but in my opinion, more fundamental issues (like how you treat customers, what's in your offer, etc) are more important
