Cryptographic keys are the most essential part of a security system. They help with everything from data encryption/decryption to user authentication. The mixture of any cryptographic will lead to the collapse of the entire company’s security infrastructure. This allows the attackers to easily decrypt the sensitive data. They authenticate themselves as privileged users and give access to other sources of information. So to avoid this proper management of keys is essential to ensure the safety of sensitive information. This is the place where a key management systems (KMS) arises. KMS is the process of putting all possible cryptographic standards in one place to ensure the security of cryptographic keys in the company. Key management KMS deals with the creation, storage, exchange, deletion, and refreshment of keys. They also deal with the members who all access the keys.
Why is a Key Management Systems (KMS) Important?
Key Management Systems is the foundation for all data security. Data can be simply encrypted and decrypted using encryption/decryption keys. This means the loss of the encryption key would invalidate the data security measures within the system. The key is the most essential for the safe transmission of data. Attackers use authentication methods like code signing to act like a trusted service and attack the victim’s computer to steal the key. Keys provide compliance with some standards and regulations to confirm whether the companies are using best practices for safeguarding cryptographic keys. Generally, well-protected keys are accessible only by the user who creates them.
Types of Keys
Symmetric and Asymmetric are the two kinds of cryptographic keys. Symmetric keys deal with data at rest. This means it is used at the time of data storage in a static location like a database. Symmetric key encryption utilizes the same key for both encryption and decryption. When an authorized user tries to access the data, then the data is decrypted with the same symmetric key and made accessible.
On the other hand, Asymmetric keys are used for encrypting data in motion. Asymmetric key encryption is somewhat what complicated than symmetric key encryption. Instead of utilizing the same key for encryption/decryption, two separate keys called public and private keys, are utilized for encryption & decryption of data. These keys are created as pairs and are related to each other. While transferring sensitive data, most encryption processes utilize both symmetric and asymmetric keys.
Possible Key States
Key Management follows a lifecycle that ensure the key is created, stored, used, and rotated most safely. Mostly cryptographic keys follow a lifecycle which involves key
- Generation
- Distribution
- Storage
- Use
- Rotation
- Backup
- Revocation
- Destruction
Key Generation
Key generation is the primary step to confirm that the keys are secure. If the key is generated with a weak encryption algorithm then any attackers can easily find the value of the encryption key. Moreover, if the key is generated in an unsecured location, the key is compromised as soon as the key is created, this is because the key is not safe for encryption. Key generators, random number generators, and AES encryption are utilized for secure key generation.
Key Distribution
The next step is to confirm the safe distribution of the keys. The key must be safely distributed to the required users through SSL or TLS connection. Suppose an insecure connection is utilized to distribute the cryptographic keys, then the security of the data encrypted by these keys is in question, the attackers act as middlemen and steal the keys.
Cryptographic Operation
Once the key is distributed, it is utilized for cryptographic operations. As previously stated, the key must be utilized only by authorized users and it must not be copied or misused. Whenever the key is utilized to encrypt the data, the key must be stored for later encryption. The most secure way for key storage is HSM (Hardware Security Module) or Cloud HSM. If HMS is not utilized then the key is stored on the client side. Suppose the key is stored on the cloud then KMS is used for secure storage purposes.
Once the key’s time has expired, then the old key is replaced with new key. Primarily the data is decrypted with an old key and then encrypted with a new key. Rotation is essential to avoid stealing keys. Rotation of keys takes place before the time period expires or sometimes the key is suspected to be compromised.
Two ways of dealing with compromised keys are revoking or destroying the key in the situation. Revoking means the key can’t be used further for encryption & decryption, even though its crypto period is valid. Destroying a key is done due to compromise or not being used for a long time. Destroying means deleting the key permanently from the database. With the destroying option it’s impossible to recreate the key unless backup is enabled. NIST standards maintain the deactivated keys in the archive. This helps to decrypt the data which is encrypted with that key in the past.
Work Flow of Key Management Systems
- User Authentication: When a user registers on the exchange platform, they create an account with a username and password. The KMS verifies and authenticates user credentials during login.
- Generation of Public and Private Keys: Upon successful authentication, the KMS generates a pair of cryptographic keys for the user: a public key and a private key. The public key is shared openly and is used for encrypting data, while the private key is kept securely by the user and is used for decrypting data and signing transactions.
- Secure Storage: The private keys are securely stored within the exchange’s infrastructure, often in encrypted form. The KMS ensures that unauthorized access to these keys is prevented through robust security measures such as encryption, access controls, and hardware security modules (HSMs).
- Transaction Signing: When a user initiates a transaction (e.g., placing a buy or sell order), the transaction details are encrypted using the user’s private key. This encrypted transaction is then sent to the exchange’s servers.
- Validation and Execution: The exchange’s servers receive the encrypted transaction and validate it using the user’s public key, ensuring that the corresponding private key indeed signed it. If the validation is successful, the transaction is executed on the exchange’s platform.
- Confirmation: Once the transaction is executed, the user receives a confirmation, and the transaction details are recorded on the blockchain or the exchange’s ledger.
- Key Rotation and Management: The KMS may also support key rotation, where new cryptographic keys are periodically generated and used to enhance security. Additionally, the KMS manages key lifecycle events such as key generation, distribution, rotation, revocation, and deletion.
Wrapping Up
Zodeak offers a variety of approaches to creating your own KMS to maintain security within your organization. We conduct webinars related to KMS, PKI, and more. In addition, we also provide training for PKIs, HSMs, and more. As a well-recognized cryptocurrency exchange script, we guarantee that your KMS meets compliance standards, and safeguards the data using all possible methods. To learn more about various aspects of data security, contact Zodeak right now!
