What Are Hardware Security Modules?

In this post, you’ll learn all about Hardware Security Modules. This includes the features of HSM, benefits of Hardware Security Modules, how HSM works and many more.

A hardware security module is a kind of computer that encrypts data and safeguards digital keys.

What is the HSM (Hardware Security Module)?

A hardware security module (HSM) is a computer device made up of one or more microprocessor chips that is used to safeguard encryption keys, encrypt files, and provide increased protection for cryptographic verifications.

HSMs are used in businesses to safeguard verifications and operations, and they must be certified in accordance with the Federal Information Processing Standard (FIPS). It must also include tailored infrastructure, a secure operating system, and data that is encrypted and safeguarded, as well as securing networking. Hardware for HSMs might be general purpose, transaction/payment-based, or cloud-based.

  • The first set is seen in information security software and bitcoin wallets.
  • While payment/transaction HSMs are designed specifically for digital payments, assisting in the security of PIN technology and electronic financial transfers (ETF)
  • Finally, Microsoft Azure and Google Cloud are two HSM cloud computing platforms and offerings.

What are the functions of Hardware Security Modules?

A hardware security module (HSM) is a specialized crypto processor that is meant to secure crypto keys throughout their existence. By safely maintaining, interpreting, and protecting cryptographic keys within a protected, tamper-resistant gadget, hardware security modules operate as trust anchors, protecting the cryptographic architecture of some of the globe’s biggest threat protection enterprises.

What are Hardware Security Modules used for?

HSMs thrives in safeguarding cryptographic keys and offering encoding, decoding, verification, and digital signature services for a broad variety of applications, so businesses acquire them to safeguard operations, ids, and software products.

What distinguishes Thales as the best HSM provider?

Thales Hardware Security Modules offer the greatest layer of assurance since cryptographic keys are all stored in hardware. Because the keys don’t ever exit the intrusion-resistant, tamper-evident, FIPS-validated gadget. Hence they offer a safe crypto basis.

Access control restrictions prohibit unapproved parties from acquiring critical cryptographic information because all cryptographic activities take place inside the HSM. Thales additionally offers processes to make safe HSM deployment as simple as possible. Thales Crypto Command Center is connected for fast and simple crypto material splitting, management, and supervision.

Also, Thales HSMs must meet high building standards and complete solution validation assessment before being put through actual life testing process to ensure the safety and reliability of each device.

Thales HSMs are online agnostic, and are the HSM of preference for Microsoft, AWS, and IBM. Thales HSMs provide a “rentable” hardware security module (HSM) solution that devotes a single-tenant device in the cloud for client cryptographic storage capacity requirements.

What is the definition of a hardware security module (HSM)?

A hardware security module (HSM) is a physical device that adds another layer of protection to confidential documents. This device is used to provide cryptographic keys for important services including encryption, decryption, and authentication for apps, ids, and systems.

These gadgets may be standalone devices or integrated in other hardware, such as smart cards, appliances, and other peripheral device. They may be used as a separate product or linked to a network server. They are also available as cloud-based services.

HSMs are used by businesses to retain cryptographic operations pertaining to trades, ids, and applications distinct from daily operations and to regulate access to those activities. For instance, a firm may utilize a HSM to protect trade secrets or intellectual property by ensuring that only authorized persons have access to the HSM while transferring cryptographic keys.

How do HSMs function?

Ensuring the integrity of a cryptographic network requires securing the keys. Maintaining the lifespan of such keys, on the other hand, is difficult. That’s where HSMs come into play. They oversee the whole lifespan of a cryptography key, which contains the next 6 phases:

  1. Preparation. An HSM, another sort of key management system, or a third-party entity may generate keys. To generate keys, a genuine random number generator should be utilized.
  2. Memory and recovery. In the event that a key is stolen or lost, a duplicate should be produced and safely maintained. They may be kept in the HSM or on external storage devices. Before being saved, private keys must be encrypted.
  3. Implementation. Mounting the key in a cryptographic hardware such an HSM is the first step.
  4. Management. Keys are handled and managed in accordance with trade norms and corporate procedures. The encryption key maintenance system manages key rotation, which involves deploying new keys when old ones expire.
  5. Documentation. Decommissioned keys are kept in long-term offline storage in case they’re required to decrypt data that was secured with them.
  6. Elimination. Only when it is established that keys are no longer required should they be safely and irreversibly discarded.

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

Digital signatures may also be created and verified using HSMs. To build an audit log, all login transactions requiring an HSM are documented. Organizations may use the gadgets to convert confidential material and procedures from print to digital format. To provide public key management while minimizing the effect on an application’s pace, numerous HSMs can be used together.

Important HSM Characteristics

Features of hardware security modules that contribute to their security include:

Sturdy construction. HSMs use specifically built hardware that complies with government standards such as the Federal Information Processing Standardization (FIPS) 140-2, Common Criteria, and the Payment Card Industry’s HSM criteria (PCI).

Impervious to tampering. They go through a ”Hardening” procedure that makes HSMs resistant to manipulation and inadvertent damage.

Safe OS. They employ an operating system that prioritizes security.

Stand Alone. To restrict unwanted access, they are kept in a safe physical section of the data center. Rather than maintaining their HSMs on site, some companies choose to secure them in a third-party data center.

Access restrictions. HSMs manage accessibility to the systems and data they safeguard. They’re built to identify interference; if tampering is discovered, some HSMs become unusable or remove cryptographic keys.

APIs (application programming interfaces). HSMs offer a variety of application programming interfaces (APIs), such as the Public-Key Cryptography Standard and Cryptography API Next Generation, which allow application incorporation and the creation of bespoke applications.

What are the applications of HSMs?

A hardware security module should be considered by every company that manages important or critical information. Credit or debit card data, proprietary information, customer data, and personnel records are examples of this sort of data.

HSMs protect data created by a variety of applications, including:

Internet sites, financial services, mobile transactions, digital currencies, intelligent meters, medical equipment, personal identification numbers and identity cards (PINs), electronic docs.

Activities such as digital signature, key creation and administration, assuring compliance, easing audits, and safeguarding digital ids are all done using these devices.

Dedicated HSMs are used by the PCI to offer the extra security requirements necessary for monetary operations. PIN management, supply of payment card and mobile app credentials, and validation features for PINs, payment cards, and other operations are all supported by these devices.

HSMs and Cloud Computing

As more critical information has gone to the clouds, the act of safeguarding confidential material has become increasingly difficult. Cloud settings do not necessarily allow for the usage of on-premises HSM devices. Users may be required to utilize HSMs located in cloud service providers’ data centers. If a supplier permits the usage of a device on the premises, connection concerns might cause undesirable delay.

Originally, cloud companies supplied their own identity control facilities.
Nevertheless, they weren’t necessarily applicable to hybrid cloud and multi-cloud scenarios. Users were left to cope with the difficulties of several key control systems in order to implement hybrid and multi-cloud solutions.

Key management as a service (KMaaS) has evolved as a method of securing encryption keys in a variety of cloud contexts. These services provide centralized, on-demand HSM technologies without the requirement for hardware provisioning. As a company grows and expands its cloud services, it may utilize the same KMaaS to configure and manage encryption keys across several cloud suppliers’ services.

The same guidelines are applicable to KMaaS systems as they do to on-premises HSMs, and they offer a range of APIs. Encryption key management activities are performed at a digital edge node using these technologies, reducing latency and enhancing application performance.

AWS, Google, IBM, and Microsoft, as well as smaller firms like Entrust and Thales, also provide cloud KMaaS solutions.

Compliance with data protection laws

Data security and privacy problems are centered on hardware security modules. Hence, they are being scrutinized more closely, as businesses and other organizations confront growing challenges in these sectors. HSMs that are more sophisticated must adhere to a number of rules and requirements, such as the following:

  • The General Data Protection Regulation of the European Union;
  • PCI Data Security Standard (PCI DSS);
  • Security Extensions for the Domain Name System;
  • FIPS 140-2, as well as
  • Common Standards.

Design of Hardware Security Modules

Tamper-proof or tamper-resistant measures may be included in HSMs. Hardware security components, for instance, may provide obvious indicators of logging and warning or become dysfunctional if tampered with. When manipulation is detected, certain HSMs may erase keys. To avoid bus probing and manipulation, hardware security modules are often secured by tamper resistant, tamper obvious, or tamper responsive packaging and include one or more cryptoprocessor chips or a module including a mix of chips.

Because HSMs are typically part of project architecture like an online banking service or a public key infrastructure, they may be stacked for high uptime. Some hardware security modules provide continuity of operations and comply with data center high-availability criteria. They could include field interchangeable parts or two power supply, for instance, to assure uptime in the event of a calamity.

Some HSMs can run on specifically built modules written in native C, Java,.NET, or other computer languages on their own. A company that wants to run business logic or specific procedures in a protected manner might benefit from this feature. Without requiring total reprogramming and customisation, next-generation hardware security modules can typically handle running and loading COTS software and operating systems, as well as other sophisticated functions.

Applications for Hardware Security Modules

A hardware security module may be used in any program that uses digital keys. In essence, compromising of the keys would have to have a severe, detrimental effect to warrant the deployment of an HSM. To put it another way, high-value digital keys should be produced and kept in a hardware security module USB or other devices.

A HSM is an integrated cryptographic key generation and protect key storage system for a certificate authority, especially for primary keys, or the highest critical top level keys.

Verifies digital signatures to aid with authenticity.

Validates the authenticity of critical files held in less protected areas like databases and encodes it for safekeeping.

Produces safe keys for smart cards.

Handles data storage keys (tape or disk) and db encryption keys (transparent).

Protects sensitive data, including cryptographic keys, against unauthorized use, disclosure, and prospective attackers.

Enables both symmetric and asymmetric cryptography.

Several HSM solutions provide considerable CPU offload for asymmetric key operations. Most HSMs now enable ECC, which offers better encryption with shorter keys.

The host CPU may conduct RSA operations on the HSM device, which is useful for applications that need high speed and employ HTTPS (SSL/TLS). Typical hardware security modules can conduct 1 to 10,000 1024-bit RSA operations per second. Some security hardware modules can do 20,000 transactions per sec.

• In PKI contexts, RAs and CAs may employ HSMs to produce, manage, and store asymmetric key pairs.

• Bank hardware security modules (HSMs) are used in the payment card sector. As a result, these HSMs provide both conventional HSM tasks and customized capabilities required by transaction operations and industrial requirements. Applications include payment card personalization and transaction authorisation. ANS X9, PCISSC, and ISO are the key standard-setting bodies for banking HSMs.

• Some registries use HSMs to sign big zone files. For instance, OpenDNSSEC is an open source program for certifying DNS zone data.

• HSMs can store crypto.

TEEs and TPMs vs. HSMs (TPMs)

TEE is a secure region generated by a primary computing microprocessor. It is meant to safeguard the quality and protection of information and code within the TEE.

A trusted platform module (TPM) is a customized chip intended to make getting its secret keys difficult and evident. These steps are designed to build confidence in the computer system. TPMs don’t contribute much processing power, but they can generate random keys and encrypt modest quantities of data.

However, a hardware security module maintains the encryption keys separate from the OS. The advantages of TEEs, TPMs, and HSMs are similar, but they are not the same. HSMs, like TPMs, show physical tampering, but they give more security than TPMs and TEEs.

Some claim that HSMs can no longer rely on physical tamper prevention and proprietary hardware. Alternatively, they may use TEEs’ security features to construct a virtual hardware security module. For instance, Google’s Cloud HSM is marketed as a cloud-based hardware security module.

These methods ease cloud-native scalability.

Nevertheless, building an HSM utilizing cloud-native solutions may increase performance and decrease infrastructure problems associated to hardware.

To sum up:

• TEEs have a broad processing architecture built in. They are elements of a chipset.
• TPMs offer limited processing power, boot sequence and other element evaluation, and a tangible guarantee of confidence. They’re a low-cost built-in element.

• HSMs provide the greatest level of security for sensitive data processing, secret key management or retention, and cryptographic processes. Peripheral devices are often more costly, however cloud technology may help make them less costlier and more extensible.

Aspects of Hardware Security Modules

The major advantages of hardware security modules are physical access control, safe key control, secure key creation, and safe execution.

No typical IT system can be fully protected from external assault. Unlike HSMs, which have several safety measures against external attacks and physical manipulation. Voltage and heat sensors, resin-embedded electronics, and drill protective foil are usual.

The assault is detected by sensors, which raise an alert and activate any required remedies, such as the elimination of keys, if an intruder tries to break open an HSM device by shattering the enclosure or using acid or ice to destroy the coatings.

Keys are only helpful if they are unpredictable, guarded, or readily guessable. There are limited options for creating safe keys in traditional IT systems since they depend on typical if-then statements. For a request, an attacker may guess the outcome by analyzing the “if” or input data. HSMs solve this by creating random keys. In order to generate random keys, they record data from random physical protocols like as air noise or atomic decay.

Crucially, a hardware security module produces, retains, and utilizes these keys to perform signatures, encryptions, and other cryptographic operations—all within the HSM’s safe environment.

Because cryptographic keys cannot leave the HSM, they are nearly hard to steal. Some hardware security modules ensure security from Trojans and insider threats by executing user programs in a safe manner. So the whole software is developed and performed inside the HSM’s secure environment.

Using HSMs: Excellent Approaches

Key qualities and advantages of hardware security modules to explore include:

Validation of FIPS 140-1 or 140-2

HSMs are validated on four levels under the FIPS standard.

As a result of these tests, an HSM is validated. This goes beyond only FIPS 140 adherence.

Open vs. Proprietary Algorithms

Consider open, generally acknowledged, and secure alternatives before using proprietary algorithms. To avoid using proprietary algorithms, make sure your HSM employs both. Digital signatures should use DSA or RSA cryptographic techniques. MD5 or SHA-1 are suitable hashing algorithms. Encryption using 3-DES is recommended.

Strongly Generated Random Numbers

To enable key creation and other cryptographic operations, any HSM must be capable of strong random number generation (RNG) or pseudo-random number generation.


The design of hardware security modules should provide congestion control and grouping in order to scale with changing network architecture.

A reliable source of time

A secure time and date source for recorded communications is required for safe non-repudiation and auditing. One of the few prevalent hardware security module flaws is an easily hacked server-based time source. Only an authorized administrator should be able to modify the time on an HSM, which should also record the occurrence securely.

Simple to use

A unified developer interface and a secure, easy user interface make it easier to use the HSM and prevent costly mistakes.

Installation of the gadget is well described

All installation and maintenance activities, such as replacement batteries, known hardware incompatibilities, machine compatibility difficulties, and physical controls on the device, should be well documented.

Backup is essential

Any HSM used for validating or encrypting data in a database or inside a certificate authority must have a secure key backup. Backup keys to numerous smart cards and keep them independently if possible.

Key security

Any keys that are transferred outside the physical boundaries of a hardware security module should be encrypted.


If the HSM detects any odd electrical activity, physical infiltration, abnormal heat, or other evidence of manipulation, it should erase all sensitive data or “zeroize” itself. This prevents a skilled hacker from gaining actual contact and collecting the secret keys. Of course, hardware security modules have a number of drawbacks, the most significant of which is cost, which varies based on the amount of protection and functionality required by the facts. Some HSMs are similarly challenging to set up and update. Cloud-native solutions, with their intrinsic flexibility, can assist with all of these problems.

Is Avi a provider of hardware security modules?

With options for blockchain, bulk key generation, certificate signing, code or document signing, encryption keys, digital signatures, DNSSEC, GDPR, hardware key storage, paper-to-digital efforts, IoT, PCI DSS, transactional acceleration, and more, choosing the correct hardware security module ensures that your organization meets compliance standards.

Thales nShield and SafeNet Network HSM are two networked hardware security module (HSM) devices that Avi supports.

Finally, here is a list of more related topics you might find interesting:
  1. Blockchain Technology
  2. Defi
  3. NFTs
  4. DAOs
  5. Crypto
  6. Web 3.0
  7. Altcoin Tokenomics
  8. Metaverse
  9. Smart Contracts

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