Algorithms performing data conversion (encryption and decryption, calculation of hash function, etc.) inside the dongle microcontroller are conventionally called hardware algorithms. The point is that both the method of conversion and the encryption keys are kept within the microcontroller memory in this way of algorithms implementation, which complicates the analysis of logic of these algorithms from the outside. See details in Chapter 11. Hardware Algorithms.
Important information
The realization of the possibility to process data outside the processor and computer memory by hardware algorithms is the main protection function of Guardant dongles.