The act of transforming sensitive data, such as credit card information or health data, into tokens that can be transferred, stored, and processed without exposing the original data is known as data tokenization. Tokenization, on the other hand, refers to the process of replacing sensitive data with non-sensitive, unique identifiers known as tokens. It does not rely on a secret key to keep the data secure. A credit card number, for example, may be substituted with a token that bears no resemblance to the original number but can still be used to execute transactions.
To improve data security, privacy, and compliance, these tokens are typically unique, unchangeable, and can be confirmed on the blockchain. A credit card number, for example, can be tokenized into a random string of numbers and utilized for payment verification without revealing the actual card number.
Advantages Of Data Tokenization
🟢 Data tokenization improves data security by replacing sensitive data with tokens, lowering the risk of data breaches, identity theft, fraud, and other cyberattacks.
🟢 Many industries are subject to stringent data protection requirements. Tokenization can assist enterprises in meeting these regulations by safeguarding sensitive data and providing a solution that reduces the likelihood of noncompliance.
🟢 Tokenization could enable safe data sharing between departments, vendors, and partners by just granting token access without revealing sensitive information.