For almost 100 years, humans have been using electro-mechanical means such as Germany’s infamous World War II Enigma machine to encrypt sensitive information and protect their methods for doing so.

Today, organizations use hardware security modules (HSMs) to achieve similar results, though by very different means. As their name implies, HSMs are physical computing devices that attach directly to computers or servers to protect cryptographic keys — both at rest and in use — in accordance with strict design standards.

Digital HSMs provide secure, external platforms for managing cryptographic keys and their use over the life cycle of both the cryptographic material and its associated data, a function that is proving increasingly vital in today’s era of BYOD, mobile payments, electronic medical records and the IoT.

Only HSMs Can Protect the IoT

In a world where each of the “things” attached to and communicating over the internet — estimated by Gartner to reach 6.4 billion by the end of 2016 alone — can assume an identity, secure a communications channel, gather data and share that data widely, trustworthy cryptography will form the basis for establishing IoT identities and protecting the resulting flood of data.

Let’s take a look at why HSMs are becoming such a vital component of internet security amid today’s IoT and ecommerce challenges.

Can You Trust Your Bots?

When an autonomous entity on the internet, be it a help bot from a major retailer or your home security system, presents its credential and asserts an identity and associated trust level, you want to be able to rely on it.

As manufacturers today generate literally millions of digital certificates and keys for devices such as gaming consoles and smartphones, all of these devices need to identify themselves. We assume, often naively, that the cryptographic infrastructure that underpins the integrity of these identity assertions is solid.

Warding Off Worms and Bugs

Until the recent explosion in crypto deployments and the concomitant surge in highly public breaches, little thought was given to securing the foundational aspects of key generation, key management and protection of core crypto applications. Things just had to work to pass first-level scrutiny.

Two wake-up calls arrived in the form of the Stuxnet worm in June 2010 and the Heartbleed bug in April 2014. The Heartbleed bug exposed a serious vulnerability in the popular OpenSSL cryptographic software library, allowing a hacker to scrape SSL keys from the compromised server.

The Stuxnet authors stole code-signing certificates and their associated private keys from a pair of Taiwanese component manufacturers, enabling their worm to replicate itself across servers, using stolen code-signing keys to mask its origin and intent.

Best Practices for Better Data Security

Even with the vast progress in crypto system design, power and flexibility though, one simple fact remains painfully true: a breach of cryptographic keys can destroy the integrity of any crypto system, no matter how elegant its implementation.

The use of HSMs would have prevented scenarios like Heartbleed and Stuxnet. For that reason alone, HSMs have become the de facto gold standard for securing the foundation of any modern crypto system.  In addition, we recommend four other best practices:

  1. Identify and locate your data: You have to know where your data is in order to encrypt it effectively, which means you have to begin the process of data categorization.
  2. Encrypt critical data: It’s far too dangerous to leave data in the clear during any phase of its lifecycle.
  3. Stick with hardware-based crypto and an HSM: Determine that the keys will only be used within the parameters of an HSM.
  4. Make the knowledge investments needed: Crypto is a tool and using it wisely necessitates understanding how the tool works. Invest in the basic building blocks of cryptographic technology and in training your people to use them. You’ll increase the probability of a secure deployment and scare off the majority of attackers.

Your Secrets Are Priceless

Remember that as long as there have been secrets, there has been a need to hide and protect them. HSMs were created for digital secrecy, and now that ecommerce and the IoT are taking off, the need for secure cryptography has never been greater.

HSMs dramatically increase the likelihood of deploying cryptography in a secure and unbreakable way. You can’t put a price on that kind of security, which is why the cost of HSMs fade in comparison compared to the cost of stolen or compromised keys or data.