What Role Does Hardware Security Module (HSM) Play in Protecting Private Keys for Crypto Wallets?

An HSM is a physical computing device that safeguards and manages digital keys, performing cryptographic operations within a tamper-resistant environment. It ensures that private keys for crypto wallets are never exposed in plaintext to the host operating system or network.

The keys cannot be extracted, only used inside the module for signing transactions. This provides the highest level of physical and logical security for digital assets.