I guess the example can make it easier.
Assume each Client on a network has an identifier(some alphanumeric sequence) which identifies it uniquely on the network. Each time the Client corresponds with the Server over the network(encrypted), the Client sends its identifier to identify itself. Now if somehow this identifier is read off the memory of the device in some way, that device can be impersonated.
Is there any way this weakness in a system can be done away with? We sure can force the Client to change its identifier at end of every session and inform the Server of the new identifier, but this would again remain stored in memory.
I hope I have managed to explain in clear enough. Thanks for your time and attention already.
/////////// Edit /////////// I am strictly looking for a solution which works in the case of a completely subverted Client program/OS/environment, which means the attacker can wilfully hook into any of the system events and processes.
/////////// Edit /////////// I'm thinking of using a combination of these ideas. So in case someone comes looking here, this might help. http://en.wikipedia.org/wiki/One-way_function & http://en.wikipedia.org/wiki/Oblivious_transfer