The Importance of HSMs for Blockchain-Based Transportation Protocol

In this article, we unveil several reasons why HSMs are vital for the emerging blockchain-based transportation protocols.

Blockchain and the Transportation Industry

Blockchain technology is extremely disruptive for almost any industry it touches. This is particularly true for the automotive transportation industry. Because it is unbeatable at defeating counterfeiting, blockchain can be successfully applied in various ways for transportation businesses. For example, it can prevent false VIN identification numbers from being used and can efficiently protect against car fraud. 

There are many innovative companies on the market that are actively developing such solutions. They may rely on permissioned private blockchains, public blockchains, or both.

Generally, blockchain provides a crypto token that is used for the payment of the goods or services associated with the company that develops the blockchain system.

Some of these companies are:

  • Amo;
  • Car Vertical;
  • DAV;
  • Gem (auto);
  • One Car Payment.

These companies are developing blockchain solutions to coordinate trips, check the identity of vehicles or vehicle owners, auto insurance, vehicle recall optimization, ownership transfer, buying or selling cars using a cryptocurrency, identifying auto parts, etc.

The importance of hsm

Besides automotive, there are other companies or consortia operating in maritime systems, urban or suburban transportation systems, and airborne transportation systems. Here are a few examples:

  • Maritime Blockchain Labs;
  • Fleetio;
  • Whim;
  • BiTA;
  • Zamna.

Why HSMs Are Important for Blockchain-Based Transportation Systems

Here is a list of the consensus and cryptographic algorithms used by some of the most important blockchain providers for automotive-based transportation systems.

As you can see, they rely heavily on cryptography, especially hashing for creating identities and asymmetric cryptography used for signing the transactions.

These operations must be done securely and always involve several Certification Authorities (CAs). Protection of the keys and security of the signature operations must be done in a secure environment such as a hardware security module (HSM). 



Cryptographic Algorithms


Delegated Proof-of-Stake+Practical Byzantine Fault Tolerance

Peer storage auditability through an efficient Merkle-based Proof-of-Retrievability scheme optimal for immutable data units

Car vertical


Delegated proof-of-stake



Secp256k1 or P-256





Delegated proof-of-stake


One Car Payment





For instance, an HSM is the only realistic way to secure a crypto wallet. This is because it provides anti-tamper mechanisms and secure storage for the private keys used for the wallet. 

In the context of the transportation industry, data flow can be very important. Therefore, hardware modules should be in charge of performing cryptographic operations because they are obviously faster and more reliable than software-based solutions.

Several of the blockchain-based transportation protocols have a native plug-in for HSMs that shows how HSMs naturally fit into the offer.


Blockchain technology is currently being successfully introduced into the transportation industry. This results in building blockchains with a huge demand for cryptographic operations, and as such, are in need of secure, high-performance systems to perform asymmetric cryptographic operations and hashing. Hardware security modules naturally provide that. Therefore, we can expect in the near future to see the growing use of such HSMs in newly created transportation blockchains.

Stay tuned!

References and Further Reading

Blog post by Martin Rupp, Priyank Kumar and Ulrich Scholten

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