There is an old joke about military doctrine: if they themselves don’t know what they are doing, the enemy definitely can’t anticipate their future actions. How much of it is true is debatable, but the same principle applies to preserving the integrity of data in databases and shielding it from hackers’ attacks.

That is how tokenization works. It takes your actual data, e.g. your user's password or bank details, and turns it into chaos – a string of random characters called a token, that is the same length and size as the actual data, but has no meaningful information whatsoever, even when its breached. If you don’t hide any real data, hackers can’t steal it.

How does it work?

Token vs. Encryption

Tokenization is better understood through the scope of more widely spread encryption. Encryption uses a mathematical algorithm to hide the data by changing its length and type. Yet, anyone with the encryption key or enough hacking skills can solve the algorithm and get their hands on your data. Encryption’s algorithms require significant computational recourse to be useful and can be a strain on older, slower systems. Tokenization, on the other hand, doesn't use a mathematical process to hide the data. Instead, it replaces your bank account numbers, client contacts, deals, and transactions numbers, with non-sensitive randomized data. The token itself becomes a map reference to the original. There is no key or algorithm that can be used to guess, and thus – hack your data. Lack of the mathematical process in tokenization also means that it requires significantly less computing power allowing quick access to the data. Tokenization saves both your money and your nerve cells.

Having in mind all the above, it would be wrong to assume that only tokenization or only encryption would be the right choice for your corporate database. Different businesses would need different, tailor-made solutions. Experienced database developers stress the need to use both – for certain aspects and various goals.

How to choose

There are a lot of options with tokens – high-value tokens, low-value tokens, single- and multi-use, different international standards, and government requirements. All of them confusing. Without spending days on the cryptanalysis, encryption, tokenization books, it can be a daunting experience having to choose between them or wondering how to make them work together. That's where a good software developing house shows its pedigree – after establishing your needs and interest by understanding how your business works, like Tentacle Solutions, do, they can advise you and implement the tokenization solution that is right for your particular business and make it as safe as possible from any hacking attempts.