If an attacker pwns your host they can do anything you can do. If you can access the smartcard, then the attacker can too. As soon as you plug the card in, the card is just as compromised as the host.

This is the reason that the SC4-HSM has a built-in display and user inputs. These serve the same purpose as the display on a PoS terminal, except that because they are a part of the HSM itself, they can't be compromised by an attacker who pwns the host that the HSM is plugged in to.

An attacker can still attempt a phishing attack, but this will be much, much harder. And for really mission-critical applications, an attacker would have to control every possible means of computing a secure hash on the host machine.

I should probably write a paper about this.

I thought that the whole point of a smartcard is that your keys, once loaded, can never be extracted again, even by the host. Rather than passing secrets to the host directly, there's a miniature PKI that does request/signature, secured by a password, using a hardware pinpad if you're very serious.

Little window for error too, since screwing up the password some small number of times results in the card being blocked, and in some cases, destroyed.

Even if the host is running hostile code, the worst it could do is forge signing requests?

> screwing up the password

If the host machine is pwned then it's not hard to steal your password.

> the worst it could do is forge signing requests

Well yeah, that's true. But if the card is protecting a really sensitive asset (like your bitcoin account) then a single forged request can do an awful lot of damage.

The point being that the malware either has to horn in on a legitimate request (and I'm not sure if that's possible or not given how PKI), or issue its own request, which the user has to authorize with password, ideally out of band using a hardware pinpad.

> ideally out of band using a hardware pinpad

Not "ideally". Critically. Without an out-of-band PIN the card is easy to compromise. And most cards don't have input devices.

And even with a secure PIN entry, without a display you can't actually know what transaction you are authorizing. So yes, the malware would have to "horn in" on a legitimate request. But if your machine is pwned that's not hard.