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Hardware Security Module (HSM)


A hardware security module (HSM) is an essential physical device utilized to bolster the security of sensitive data through cryptographic measures. This device generates and manages cryptographic keys crucial for encryption, decryption, and authentication processes across various realms, including databases, user identities, and application systems.

HSMs offer versatile integration options, seamlessly fitting into diverse hardware environments such as smart cards, appliances, and other external devices. They can be employed either as standalone offline units or interconnected with network servers to cater to different operational requirements. Additionally, HSM functionalities are also extended to cloud-based services, facilitating secure data management in virtualized environments.

Hardware Security Module (HSM)

Businesses utilize hardware security modules (HSMs) to regulate access to and isolate cryptographic functions related to transactions, identities, and applications from everyday operations. For example, a firm may utilize an HSM to protect trade secrets or intellectual property by limiting access to the HSM to only authorized persons in order to perform a cryptography key transfer.

How do HSMs work?

In order to keep a cryptographic system secure, the keys must be kept safe. However, managing the keys' lifecycle is a challenge. And that is the use of HSMs. They manage all parts of a cryptography key's lifecycle, including the six processes listed below:

  • provisioning. An HSM, another kind of key management system, or an outside company that carries out this function creates keys. Keys should be generated using a genuine random number generator.
  • storage and backup. In the event that a key is lost or compromised, a duplicate should be made and kept in a safe place. They can be kept on external media or in the HSM. Before being stored, private keys need to be encrypted.
  • Implementation. Installing the key on a cryptographic device, like an HSM, is required for this.
  • Management. Based on the internal regulations of a business as well as industry standards, keys are managed and observed. The process of rotating keys-deploying new ones as old ones expire-is managed by the encryption key management system.
  • Archiving. Decommissioned keys are stored offline for a long time in case it becomes necessary to access data that has already been encrypted using that key.
  • Disposal. Only when it is decided that keys are no longer needed should they be safely and irreversibly destroyed.

The encryption and decryption procedures are managed by the hardware security module, which also safeguards cryptographic keys.

Hardware Security Module (HSM)

Digital signatures can also be created and verified by HSMs. To provide an audit trail, every access transaction involving an HSM is recorded. Businesses can transfer sensitive information and processes from paper documentation to digital format with the help of these gadgets. Public key management can be provided by combining many HSMs to reduce the impact on application speed.

Types of HSMs

Two primary categories of hardware security modules exist:

  1. General Purpose
    General Purpose HSMs are mostly used with Public Key Infrastructures, cryptowallets, and other basic sensitive data. They may employ the most popular encryption methods, including PKCS#11, CAPI, CNG, and more.
  2. Transaction and Payment
    Payment and transaction HSMs are the other kind of HSM. These HSMs are designed to protect payment card and other sensitive transaction information. These types of Hardware Security Modules have a smaller range of businesses they can operate with, but they are great for assisting with Payment Card Industry Data Security Standards (PCI DSS) compliance.

Use Cases of HSMs

HSMs have a wide range of applications, all of which entail the encryption and decryption of private or sensitive data. Some of the most popular examples are:

  1. Protection of company secrets and privileged access. An HSM can help reduce the impact of insider threats. That is because no one, not even an experienced internal hacker, can interfere with what is going on inside an HSM. In order to avoid exfiltration, you can also use an HSM to control access to private information that your DevOps team requires.
  2. Key management. HSMs are excellent at handling the keys used in cryptography. HSMs allow you to manage multiple keys, whether they are installed in a cloud environment or on-premises.
  3. Authentication and identity management. To secure the infrastructure of your company, an HSM helps create reliable identity credentials and authenticates each user against the necessary credentials.

Key features of HSMs

Features of hardware security modules that enhance their security include the following:

  1. Secure design. Government standards like Federal Information Processing Standardization (FIPS) 140-2, Common Criteria, and the HSM requirements of the Payment Card Industry (PCI) are all followed by the specially developed hardware used in HSMs.
  2. Tamper-resistant. HSMs are hardened to make them more resistant to unauthorized manipulation and accidental damage.
  3. secure operating system. Their operating system is security-focused.
  4. Isolated. They are kept in a secure physical section of the data center to prevent illegal access. Some firms choose to store their HSMs in a third-party data center rather than on site.
  5. Access control. Access to the devices and the data they safeguard is managed by HSMs. They are made to display indicators of tampering; if tampering is detected, some HSMs erase cryptographic keys or become unusable.
  6. APIs. A variety of application programming interfaces (APIs), such as the Public-Key Cryptography Standard and Cryptography API Next Generation, are supported by HSMs, facilitating the development of custom applications and application integration.

How are HSMs used?

Any company that handles valuable or sensitive data should consider implementing a hardware security module. Credit or debit card information, intellectual property, customer information, and employee information are examples of this kind of data.

HSMs protect data produced by a variety of applications, such as the following:

  1. websites
  2. banking
  3. mobile payments
  4. cryptocurrencies
  5. smart meters
  6. medical devices
  7. identity cards and personal identification numbers (PINs)
  8. digital documents

These devices are also utilized for a variety of tasks, including digital signatures, key creation and administration, guaranteeing compliance, streamlining audits, and safeguarding data and digital identities.

Specialized HSMs are used by the PCI to offer the extra security features needed for financial transactions. PIN management, the provision of payment card and mobile app credentials, and the ability to verify PINs, payment cards, and other operations are among the applications that these devices support.

Hardware Security Module (HSM)

Cloud computing and HSMs

As more sensitive data has been moved to the cloud, the process of safeguarding it has become increasingly complex. Cloud settings may not always support the use of on-premises HSM devices. Customers may be required by cloud service providers to use HSMs housed in their data centers. Issues with connectivity can cause unwelcome latency in the system if a provider permits the usage of a device on the premises.

At first, cloud vendors provided their own key management solutions. Nevertheless, those weren't always transferable to multi-cloud and hybrid cloud settings. Customers were left dealing with the difficulties of several key management solutions to support their hybrid and multi-cloud plans.

KMaaS, or key management as a service, has become popular as a means of securing encryption keys in various cloud contexts. These services eliminate the need to deploy hardware by providing centralized, on-demand HSM-level tools. A company can use the same KMaaS to deploy and manage the encryption keys it requires across the services of different cloud suppliers as it grows and diversifies its use of cloud services.

KMaaS products provide many APIs and follow the same requirements as on-premises HSMs. By handling encryption key management tasks at a digital edge node, these systems reduce latency and enhance application performance.

Cloud KMaaS options are available from AWS, Google, IBM, Microsoft, and smaller organizations like Thales and Entrust.

How Using an HSM Can Help Your Business

Compared to utilizing a traditional web server, HSM offers much more secure key storage. When businesses use their web servers to operate many applications, it can create vulnerabilities that cybercriminals can attack. HSMs are devices with few potential points of attack. For this reason:

These devices are used by public certificate authorities and registration authorities for the creation, storing, and management of their private key pairs. (Note: In order to maintain the root CA's security, it is typically stored offline.)

These devices are used by businesses using private PKIs to access and store the keys that are used to sign documents, software, and certificates.

Using an HSM secures your private code signing keys and prevents exposure risks like those HashiCorp experienced earlier this year. Customers who utilize their GPG private key to sign official product downloads and upgrades were notified by HashiCorp on April 22 that the third-party (Codecov) security incident had exposed the key.

Essentially, the main point of the matter is that confidential information from Codecov's continuous integration (CI) environments was exported by an unauthorized user by means of an exploited vulnerability. Among the exposed CI environments was HashiCorp's, which contained the GPG private key and other "sensitive secrets" for the company. It wouldn't have been exposed if HashiCorp had kept their key in a safe HSM rather than the CI.

How HSMs Improve IT and Data Security

HSMs are useful for a wide range of additional PKI and general cybersecurity applications. Using an HSM, you can:

Store and safeguard all of your cryptographic keys throughout their lifecycles. Generally speaking, HSMs are independent, network-connected devices that are not part of your servers. This aids in maintaining the security of your keys at every point of their lifecycle, from generation to eventual destruction or revocation.

Create the strongest cryptographic keys possible for your PKI. True random number generators (TRNGs), which are included in HSMs, provide unpredictability and randomness.

Hardware Security Module (HSM)

You can "zeroize" your keys to protect their security. HSMs are designed to wipe or destroy all stored cryptographic data in order to prevent compromise because they are tamper-resistant devices (both for logical and physical attacks).

Protect the cryptographic services and operations provided by your company. Key exposure can be avoided by limiting the use of certain functionalities (such as signing documents, programs, and PKI certificates) to the safe, standalone environment of the HSM.

Improve server efficiency by using load balancing. HSM devices are stripped-down, independent devices that can-do functions that would otherwise slow down your servers. By offloading cryptographic activities, certain HSMs can function as web traffic accelerators.

Keep your keys safe from unsecured extractions that can result in hacking. To stop your encryption keys from being extracted in plaintext format, "wrap" or encrypt them.

Secure the keys to your production, testing, and development environments. Your internal production and testing environments' software and systems rely on private PKI keys, which are safeguarded by an HSM, so that these systems can utilize them without requiring direct access. (Note: never utilize the same HSM across numerous environments; instead, use a different HSM for each environment to reduce data security risks).

Ensure compliance with data security requirements and streamline audit procedures. Since HSMs adhere to certain industry standards, they are usually verified hardware components that guarantee compliance. They also offer tamper-resistant logs that tell you about:

  • what cryptographic operations they're used to perform,
  • when these operations were carried out, and
  • who was responsible for authorizing those operations?

What HSMs Do: HSM Use Cases & Applications Within Organizational Environments

Digital signatures and payment-related data are usually safely stored in hardware security modules. Nonetheless, they have a wide range of current and future applications. Here are a few applications for HSMs that are now in use around the world:

  • Secure digital IDs for passport-related systems
  • protecting root CA keys (for both private and public CAs),
  • confirming the details of the user's identification,
  • enabling large-scale cryptographic operations in corporate settings.
  • Securing blockchain signatures' root keys.
  • Developing strong credentials for linked technologies across a variety of industries (automobiles, manufacturing, medical devices, and game consoles).
  • Protecting the streaming services' digital watermark properties.

Data security and privacy compliance

Hardware security modules are crucial to data security and privacy concerns. As a result, they are under growing scrutiny as businesses and other organizations confront rising challenges in these areas. A variety of standards and laws, such as the following, must be followed by more specialized HSMs:

  • European Union's General Data Protection Regulation
  • PCI Data Security Standard
  • Domain Name System Security Extensions
  • FIPS 140-2 and
  • Common Criteria.

Advantages of Using HSMs

Benefits of Hardware Security Modules include the following:

  1. Meeting security standards and regulations.
  2. A high level of authenticity and trust
  3. Systems that are tamper-proof, tamper-evident, and tamper-resistant to offer incredibly secure physical systems
  4. Offering the market's greatest level of protection for sensitive data and cryptographic keys
  5. Automated lifecycle tasks for cryptographic keys that are rapid and effective
  6. Storing crypto keys in one location as opposed to several different locations.

The takeaway

Hardware security modules are a central piece of data security in the enterprise. They offer enterprises the centralized capability for digital signature and authentication, as well as key generation, management, and storage. HSM technology has proven to be flexible enough to keep up with the cloud transition and the evolving threat environment that enterprises confront today.

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