You May Not Know the Proper Practices
Investors may not know the proper practices when trading popular assets like Bitcoin. Yet, there are important terms like encryption that should be reviewed before getting involved in a digital asset or cryptocurrency transaction. In fact, encryption is one of the most important tools for protecting data. Many organizations use encryption to protect sensitive information, but this comes with a challenge: how do you ensure that only authorized users can access encrypted data? The answer is using cryptographic key management solutions. These processes are used to generate, store, and manage encryption keys. I will discuss why key management is important as well as the best practices for managing crypto keys in your daily environment so that you can keep your data safe as well as remain compliant with regulations like GDPR.
Key Management Challenges
Strong data protection management is a critical key component of cryptography. It is the process of generating, storing and protecting cryptographic keys that are used to encrypt as well as decrypt data. It is essential that key management best practices be implemented across all parts of an organization to ensure that keys are always available as they are needed, whether employees are traveling or accessing data from remote locations using mobile devices. While some organizations choose to manage their own key operations internally, others employ third-party key management providers (KMPs) because they don’t have the expertise in-house or because managing keys outside their network would be easier for them. Regardless of how you choose to manage your crypto assets—whether internally by establishing policies and procedures, or by outsourcing this task entirely—it’s important for any organization concerned about data security to keep several things in mind:
Cryptographic key management best practices should be established early on in the development lifecycle so that everyone understands how they are supposed to handle cryptographic information from start through finish. This helps ensure consistency throughout an organization while also reducing confusion around what types of actions require additional approvals before being completed within an IT environment.
What are Cryptographic Key Management Processes
“Key management” is the process of managing cryptographic keys and associated data. Keys are fundamentally used to encrypt and decrypt data, or otherwise protect sensitive information from unauthorized disclosure.
Cryptographic key management best practices include:
- Creating and storing keys
- Protecting data at rest
- Protecting data in use
- Protecting data in flight (i.e., over a network)
The following sections provide an overview of these four areas of cryptographic key management best practice.
Creating and Storing Keys
The best practice method includes using separate keys for the encryption of data at rest and in-flight, which is why this process is also known as key management. The cryptographic keys should be used to encrypt the data. It’s important to note that there are two types of cryptographic keys: symmetric and asymmetric.
Symmetric Keys. The symmetric key is a secret shared between one or more parties, who can then use this shared key to securely communicate with each other over an untrusted medium like the Internet without having to go through another party (like a certificate authority). This symmetric key can also be used for authentication purposes if you want your server application or client application to authenticate themselves with each other.
Asymmetric Keys. Asymmetric cryptography uses two different types of cryptographic keys — private and public — to encrypt and decrypt data. A private key is known only by the owner of an asset; anyone who has possession of this key can spend funds associated with it on the blockchain. This type of key is also known as a secret key because it should never be shared with anyone else (unless they are authorized). A public key is used by people who want to send money to an account or pay for goods or services using cryptocurrency; this type of key is made available through an address on the blockchain network where funds are stored.
Protecting Data at Rest
Data at rest is any information that’s stored on a hard drive, server, or other storage device. Data at rest should be encrypted and even stored offline (in cold storage instead of hot storage) to prevent unauthorized access to it. If in warm or hot storage, protection should include the aforementioned symmetric keys or asymmetric keys (also known as public/private key pairs). The symmetric key is the same for everyone who has access to the data; in other words, it’s not secret and anyone with access to it can decrypt the information. An asymmetric key pair contains two different but related pieces of information: one piece of information is used to encrypt something and another piece of information is used to decrypt what was previously encrypted.
Protecting Data in Use
As explained, encryption is a process of converting original data into a form which can not be read without proper access, or decrypting the ciphertext back to its original form. Encryption must be used to protect data in use, that is while being processed by a computer (data in use) and also when at rest or stored on media (data at rest). This will protect the information from unauthorized access or disclosure (including eavesdropping), but does not by itself prevent unauthorized modification – crypto-algorithms are one-way functions.
Cryptography helps ensure confidentiality between parties who wish to communicate securely over an insecure channel.Cryptographic methods include using ciphers, message authentication codes, hash functions and digital signatures.
Protecting Data in Flight
Thus, protecting data in flight means encrypting it when it is sent over public networks.
An optimal way to do this is with TLS/SSL, also known as HTTPS. This protocol has become the standard for secure communication on the web with all major browsers supporting it.
In addition to using TLS/SSL for all websites, you can also use a VPN service or an encrypted network connection to protect your privacy when downloading files or visiting other sites. Other measures include securing your messaging protocol (such as WhatsApp) and using secure communications protocols like Signal.
Key Backup and Recovery
With high sensitivity encryption, information will only be accessible through limited means and finite instances. So keep in mind that if you lose a private, personal key or it is stolen, it will only be accessible if you have actively backed it up.
Backing your keys up is the most common method for key recovery.
In these cases, the backup includes all of the components needed to restore that key: its private component and encryption rules (which are typically stored in an encrypted form).
Again, this method requires users to maintain backups of their keys, which is inconvenient and introduces security risks if those backups aren’t properly secured. It also requires them to use a separate application for backup generation or import/export operations as opposed to being able to do so seamlessly from within their existing applications.
Use a centralized crypto key management solution to manage encryption keys, reduce complexity, and remain compliant.
One of the most important things to do when managing encryption keys for your data is to use a centralized crypto key management solution. This can help reduce complexity and make it easier for you to remain compliant with data protection laws.
Crypto key management is one of the most important aspects to any organization’s data security strategy. Whether you are storing sensitive information on-premises or in the cloud, it is crucial that you have a comprehensive key management solution in place. You can read more about best practices for crypto key management in our whitepaper.