This technology uses a miniaturized electronic chip ( called a microchip ) inside the key which contains non-volatile memory. This type of memory doesn't erase when power goes off.
The key contains a unique serial number embedded in the microchip and the programming necessary to transmit that number to receiver in the immobilizer when the key is plugged in.
The car engine starts once the serial is validated by matching the signal transmitted to the one stored in the immobilizer. However, the car will not start if the signal is not recognized.
Some modern cars don't use a key at all. In this case a device called a "fob" must be close to the receiver when the start button is pushed in the vehicle.
Unfortunately, due to the use of copyright and trademark laws, each manufacture has their own way to implement their system. In other words there is no standardization between manufacturers.
Cars that utilize a chip key of some kind depend on what is called and engine immobilizer. An engine immobilizer is a is a part of your car's anti-theft system.
When you insert your key into the ignition switch the key transmits an electronic code to the vehicle.
The engine will only start if the code in the transponder chip inside the key matches the code in the receiver in the vehicle's immobilizer. Transponder or chip keys are costly to replace. Only your dealer or a professional locksmith are qualified to replace or reprogram these keys. In most cases, the locksmith route is the cheaper way to go.