Unloopers are interfaces used by pirates to workaround a particular class of anti-piracy countermeasure. Typically what happens is providers send specially crafted messages to pirate cards which cause them to hang or misbehave from that point on (analogous to malicious internet packets that deliver code which corrupts or deletes data files).
Unlike blockers, which filter messages on-the-fly to prevent undesired ones reaching cards, unloopers are typically standalone devices used to recover cards once they've already been hit by a countermeasure - one which cripples it so badly it can't be repaired by a Phoenix.
Unblockers induce glitches in clock, reset and/or power at critical points in time. This is analogous to bumping a turntable or jukebox to overcome a skipping record. This is done using a microcontroller, most commonly Atmel's 90S2313 (which is fast and cheap) running firmware tailored to the particular countermeasure. Once the sticking points have been bypassed, messages are sent to the card from a host application to correct the damage. A regular Phoenix interface isn't sufficient because the crippled card is unable to receive the messages without intervention by the unlooper at the right moments.
This approach is different from MOSC techniques like replaying a message to reenable a chid after it was revoked by the provider. MOSC is done using an ordinary Phoenix interface. Damaged cards that require an unlooper can't be rescued by a Phoenix though. They serve different purposes.
Different unlooper code is required for different systems, eg Seca vs DirecTV. Sometimes the code is public and people build or reprogram their unloopers themselves, but at other times the unlooper technique is secret and the unlooper boards are sold with copy-protected microcontrollers (which tend not to be very secure but that's another story).
Unless you're using a pirate card and have a specific problem that an unlooper is known to fix, an unlooper is of no use to you. Unless you're a longtime pirate, or a programmer who studies protocol attacks, there's really not much point hoarding such stuff. I recommend you just sell it on a trader forum for whatever you can get, or pass it on as your friend did. The piracy benefit of unloopers tends to be short-lived anyway as providers adapt when unloopers appear.
Thanks for sharing the photo, it's always interesting to see what's about. Here's a . I can't help you with the jumper links/dip switches: their function probably varies depending on what code the microcontroller is running.
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