HSM (Hardware Security Module)

Hardware Security Modules (HSM) are security solutions powered by either a hardware or cloud storage platform that is designed to keep digital keys for future transaction verification. Typically, HSMs function through external storage devices that can be plugged into a computer or network servers.

HSM was created to cover the whole security process relevant to the management of a user’s private keys. This includes the creation, distribution, safe-keeping, deletion, and archiving of digital keys. Through HSM, hardware crypto wallets and blockchain networks can be able to establish stronger security layers through devices that help encrypt a user’s private keys.

Today, HSMs are already being employed by most traditional banking institutions. This is seen from banking services that require users to link their HSM-containing devices on their accounts in order to approve transactions.