Tokenization and Encryption. Which One is Ideal?

What is tokenization?

The process of converting meaningful data into random characters or strings known as the token. Whatever data you have such as account details, word files, excel sheets etc. all become meaningless when tokenized. The term ‘token’ serves only as a reference to the real data but does not have the capacity to guess to those actual values.

This happens as tokenization does not have the ability to use the mathematical process that converts the required data. No key, algorithm or pattern can be utilized to extract the data from a token. On the other hand, this method uses the database known as the ‘token vault’ that stores the relationship existing between the token and private or sensitive value. However, the actual data that is stored in the vault is later secured mostly with the help of encryption.

The value token stands tall as it can be used as an alternative for the actual data. In any other case, for instance, the option of processing a credit card payment, it gets submitted into the vault where the index keeps on recording the real value for the sake of authorization reasons. The end user, however, experiences the objective being performed seamlessly/tirelessly and aren’t even aware of how the data is traveling to the cloud so quickly.

Advantages of token:

As mentioned above, tokens do not have any mathematical connection with the data.

They have no data to show even if someone is smart enough to hack the system.

Importance, however, should be given to the design of the token to improve its overall performance.

Encryption:

Along with tokenization comes encryption that transforms simple text data into an unreadable form known as ciphertext. To unlock it, you need to enter the rightful key to gain access or in short decrypt it. In the current era, SSL is the most commonly used type of encryption in tools and software that protects the data once it gets transmitted to the internet.  Millions of users encrypt the data on their systems using built-in capabilities of encryption either of the OS or third-party tools of encryption.

Advantages of encryption:

Encryption uses AES 256 algorithm that is termed as ‘unbreakable’

It does not give access until you insert the right key or password

Encryption is easier, better and different than password protection in all aspects

Encryption decrypts your data and turns it into the meaningless pile of data

Uses of encryption and tokenization:

Encryption is being used to protect and secure sensitive data folders and structured fields like PII and payment card data. Encryption can also be used to protect unstructured data in textual long passages.  SSL simply relies on the structure of encryption to produce a protected tunnel between the website and the user. Asymmetric key encryption is another important aspect of SSL certificates that validate the identity.

Tokens are exceedingly being used to protect social security numbers, emails, numbers, account details etc. the systems of many running companies totally rely on social security numbers, driver’s license, passport numbers as rare identifiers and the same identifiers are equipped to access the data for order status, billing, customer service and more. In addition, tokenization is also being used to secure data to maintain the utility of the backend system(s) while not giving up the data and the PII to hackers and intruders.

Drawbacks:

Tokenization:

The major issue of tokenization is they quite easily become an eye-catching option for hackers and fraudsters. The hackers and intruders who were once in search of the basic data are now converting towards this medium of tokenization.

Encryption:

The only drawback of encryption is that it the key of encryption also needs to be protected. You lose the key, you lose access to your data, sometimes even forever. Only a key can encrypt, and hence the same is needed to decrypt the data.