IBM has entered the crypto custody market with the launch of Shuttle’s custody solution based on its network. The solution uses a hardware security module (HSM) instead of cold storages and claims to be much more efficient, therefore.
The network is different from cold storage in which the private keys are stored in a device that is not connected to any sorts of networks. Although the storage may be secure it is not efficient and the idea “sounds a little oxymoronic” according to Brad Chun the chief investing officer of Shuttle.
The key idea behind HSM is to enable companies to deal with their clients’ data easily yet the data should be secure to attacks and breaches. Meanwhile taking assets out of cold storage can be a hassle.
In an HSM the data is stored encrypted between multiple layers of data so that it can be stored in the pre-existing databases for recovery and backup. Such a solution can be used for digital assets beyond cryptocurrencies including real estate and IDs.
Furthermore, an official highlighted that it is easy to switch platforms for this solution. In the future, if someone can provide a better network than IBM the solution can be switched onto that network based on customer demands.
IBM is not the only one that has its own HSM as last week Switzerland’s AG announced the launch of their own HSM solution.
However, the usage of HSM reduces the security provided by cold storage. The performance of these HSMs may decide the tech’s future.