You have the option of encrypting the updates (the *.wyu files) by using a password. This is an alternative to the limiting updates on the server side by using, for example, a product key.
To enable update encryption open your wyBuild project, then click File -> Properties -> Update & server files. Then check the "Encrypt updates" checkbox and enter the password you want to use.
Storing the password in the client.wyc
The default behavior of update encryption is to store the password in the client.wyc file. This way your users won't have to deal with passwords.
Passing the password to wyUpdate at runtime
The other option is to pass the password to wyUpdate at runtime using the -password commandline option: