This could change and it could be a privilege completely revoked too if abused (which is likely what will happen in the very near future).
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If its signed and encrypted and somewhat routinely updated, then its a really good system to differentiate carts from dumps, and users with carts from users who dumped the carts and then tried to... dump the carts. And if it fails, you then ban the cert outright. But you also have someone routinely flagging their own console as a bad actor, so you ban that too.
Pure speculation at this point, and pirating on the switch is only dumb if you care about online (atm).
Besides your speculation, You are correct, N have system up there security on the carts from the 3DS.
my question is If the dumps are true 1:1 then they have everything that is on the cart, so surely we have the information that is stopping from backups working online already, but simply not returning it correctly when asked (or maybe TX fucked up the implmentation some how).
also to the person asking how TX can play roms without owning the cart processor,(speculating) it intercepts the OS's calls and redirects them to the SD, therefore never needing to touch the cart's chips.