Tokenization

Tokenization is a privacy-enhancing technique that replaces sensitive data with a unique identifier (token) to protect the original information. The token retains no meaningful information to an unauthorized user while allowing authorized parties to process transactions securely.

Example #1

Imagine a payment app replacing your credit card number with a random token during online transactions.

Misuse

Misusing tokenization could occur if a token is not securely generated, leading to unauthorized access to the original data. For instance, if a token is reversible and links back to the sensitive information it represents, a data breach can expose the actual data, risking consumer privacy and security.

Benefits

One significant benefit of tokenization is reducing the risk of data breaches since stored tokens are meaningless to attackers. For example, even if a hacker accesses a database of tokens, they gain no valuable information without the corresponding key to decrypt them.

Conclusion

Tokenization plays a crucial role in safeguarding sensitive data and enhancing consumer privacy in various transactions and interactions. By utilizing tokens rather than actual data, businesses can protect consumer information and mitigate the impact of potential breaches, aligning with CAP's mission of promoting transparency and fairness in the marketplace.

Related Terms

Data PrivacyAnonymizationData ProtectionData Security