Blockchain & Cryptocurrency Glossary

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Key Management Service (KMS)

1 min read
Pronunciation
[kee man-ij-muhnt sur-vis]
Analogy
Like renting a safe deposit box in a bank that handles the physical security and access controls for your valuables.
Definition
A managed service for creating, storing, rotating, and controlling access to cryptographic keys used to encrypt data, sign transactions, and secure communications.
Key Points Intro
KMS offerings centralize and harden key operations with built‑in controls and auditing.
Key Points

Key storage: Uses HSM‑backed vaults or software encryption.

Access control: IAM policies, roles, and grants for key usage.

Automatic rotation: Scheduled key rotation without code changes.

Audit logging: Records all key operations for compliance.

Example
A DeFi protocol uses Azure Key Vault to manage private keys for signing transactions, with RBAC limiting use to the signing service.
Technical Deep Dive
KMS exposes APIs (e.g., AWS KMS `GenerateDataKey`, `Encrypt`, `Decrypt`). Customer Master Keys never leave HSM. Data keys returned encrypted under CMK. CloudTrail or equivalent logs all API calls.
Security Warning
Misconfigured IAM roles can expose keys; enforce least privilege and monitor anomalous API calls.
Caveat
Service outages can block key operations; design fallback or multi‑region redundancy.

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