What is Tokenization?
A data security technique that replaces sensitive data with non-sensitive placeholder tokens while storing the original data in a secure vault.
Tokenization protects sensitive data by removing it from systems that don't need the original values.
How It Works
- Sensitive data (credit card number, SSN) is sent to a tokenization system
- A random token is generated to replace it
- The mapping is stored in a secure token vault
- Systems that process the data use tokens instead of real values
- Only the token vault can reverse the mapping
Tokenization vs Encryption
- Encryption: Mathematically transforms data; reversible with the key
- Tokenization: Replaces data with random values; no mathematical relationship
- Tokenization is preferred when the processing system doesn't need the real data
Where It's Used
- Payment card processing (PCI-DSS compliance)
- Healthcare data (HIPAA compliance)
- Cloud data protection
- Apple Pay and Google Pay use tokenization for card numbers
Related Terms
Encryption
The process of converting information into a code to prevent unauthorized access. Encryption transforms readable data (plaintext) into an unreadable format (ciphertext) using a cryptographic algorithm and key. Only those with the correct key can decrypt and read the original data.
PII (Personally Identifiable Information)
Any data that can be used to identify a specific individual, including name, address, phone number, email, Social Security number, and biometric data.
Pseudonymity
The state of using a consistent fake identity rather than your real name. Unlike anonymity, pseudonymity allows building reputation and history while protecting real-world identity from casual observers.
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