Abstract: A machine security system for authenticating a machine key is disclosed. The machine security system comprises a microcontroller for detecting insertion of a machine key in a key slot of the machine. The machine key comprises of an embedded transponder. Based on detection of the machine key in the key slot, the microcontroller transmits an interrogation signal for charging the transponder. The microcontroller then receives a response signal from the transponder. The transponder sends the response signal when substantially charged by the interrogation signal. The response signal is encoded with an authentication code for authenticating the machine key. The microcontroller decodes the authentication code from the received response signal and authenticates the machine key based on the decoded authentication code.