Can a flash drive be used like a password for a computer?? it has to be plugged in for the comp. to work??

i saw somewhere that a flash drive can be used like a password. for the comp. to be able to function, the flash drive has to be plugged in. but for the lie of me, i cant figure out how to do it. if ne 1 knows, please name the program that i can use. thank you
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