Hardware Security Module (HSM)

A hardware security module is a dedicated appliance that generates, stores and uses cryptographic keys inside tamper-resistant hardware, so that applications can ask it for a signature but never obtain the key itself. Banks and payment networks have used them for decades, and custodians, exchanges and issuers use them for the same reason: the key exists in one physical place under one set of controls, and extracting it means defeating hardware built to destroy its contents when opened. What an HSM enforces beyond storage is policy — which operators may authorise which operations, how many of them are required, and what is logged — which is why it appears alongside dual control and key ceremonies rather than instead of them. Two limits are worth naming. It protects the key, not the request, so an attacker who reaches the application can ask for signatures without ever seeing the key. And a signing appliance connected to a live service is closer to a hot wallet than to cold storage, whatever the hardware is rated to withstand.