Tokenization vs Encryption:  Learn Differences Between Both

Edwin HofferTechnical Expert
This article covers an all-important comparison between Tokenization vs Encryption. Also, read about What Tokenization & Encryption is in detail. Both technologies are used for Cloud data security to prevent cyber crimes.

As the technology develops, every year there is an increase in the number of data breaches cases. Where the technology is making things easier, cybercrime is also getting easier for computer criminals around the world. Therefore, Tokenization and Encryption are used in the internet world to secure information on the web. 

When the data is in a transmission state or in rest mode, both these two technologies are capable of keeping information secure on the internet. However, they both have to satisfy the regulatory demands for meeting the level of security policies in an organization. These requirements include points that come under the PCI, GLBA, HIPAA-HITECH, EU GDPR and DSS. 

Well, both Tokenization and Encryption are effective technologies for data obfuscation but, they are neither same nor interchangeable. Each one of the technology comprises its own advantages disadvantages. Based on these factors, one can prefer the method that suits the best under several circumstances. This informative blog is going to familiarize readers with data security concepts that illustrate the difference between Tokenization and Encryption.

Overview of Tokenization vs Encryption

This tabular structure will be giving a blueprint in the mind about what makes them different from each other. So, let begin!

Translates the plain text into a ciphertext with help of advance Encryption algorithm in a mathematical manner.
Creates a token value in a random manner for the plain text and saves the database mapping.
The ciphertext is non-understandable, which is having text arranged in complexes manner.
Tokens are served as the placeholders or references for the original data.
Useful for the confidential exchange of information where only the second person knows the decryption key.
Since the requirement of direct access to the token value mapping is necessary, therefore, it is difficult for data exchanging.
Widely used in the structured as well as unstructured data like a bundle of files.
Only applicable to the structured data like social security numbers or payment card.
The original data leaves the enterprise network but in an encrypted form.
Original data will not leave the enterprise because this satisfies specific requirements for data compliance.
A major advantage is that it is easy in use and can be applied for unstructured information.
The primary benefit is that there is no hassle of managing Encryption keys.

What Is Tokenization? Let’s Explore More

Tokenization is the turning process of taking meaningful data like an account number into a random character string termed as a token, which would have no value if got leaked. The tokens serve as a reference to original information, but cannot be utilized for guessing those values. 

This is so because unlike Encryption, Tokenization is not exhibiting any mathematical procedure for transforming confidential data into a token. Neither a key nor an algorithm is present here, which can be applied for deriving the original content out of the token. Well, this concept of data security technique uses a database, termed as a token vault. It is used to maintain a relationship structure between sensitive value and a token. The real information gets secured in this token vault database, often through Encryption.

This token value can be applied in several programs as a substitute for original information. If someone wants to view the real content – for example, processing a payment through an online saved credit card – the token gets submitted to the database and an index is used for fetching the original content value to regain access back into the hands of the authentic person. At the user side, the entire operation is carried away in a flawless manner via a browser or application. One is not even aware of the fact that things are being stored in the cloud in another format.

The benefits of this Tokenization technique is that there is no existence of the mathematical relationship to represent the original data. Even in a case of things getting revealed, then no attackers will be able to determine the actual meaning. There is no key that can reverse things back to their initial state. Well, in order to make the Tokenization process stronger, individuals can provide different considerations for token designing and hence, customize it.

Now Its Time to Get Brief With Encryption Process

‘Encryption’ is a security procedure that uses different algorithms for transforming an understandable content into a non-understandable content. In technical terms, this non-understandable content is known as ciphertext. A security algorithm and a key are used for decrypting the information and hence, changing the ciphertext into original content. 

Nowadays, SSL Encryption is most widely used for protecting information because data gets transmitted over the Internet. People around the world encrypt their data on the PC itself against the sudden leakage of confidential data in a scenario where a computer gets stolen. In this way, it can be used for thwarting government surveillance and theft of sensitive data.

There are 2 main approaches involved in the Encryption technique I.e; symmetric key and asymmetric key. The symmetric key uses one key for Encryption as well as for Decryption. This means that there is only one key to lock and unlock the house door. The major drawback with this approach is if the secret key is comprised, it is a huge risk from a security perspective.

Well, this disadvantage of symmetric Encryption gave rise to asymmetric Encryption. This technique enables several organizations to share the encrypted data without maintaining a set of the same Encryption or Decryption keys. This asymmetric Encryption technology comes in a pair of keys, where one key is for Encryption purpose and the second one is totally dedicated for the Decryption purpose.


Organizations are migrating their data on the cloud in a rapid manner. This the reason due to which Encryption and Tokenization are coming widely in use for data security in cloud services. If agencies of the government sector subpoena information stored on the cloud then, service providers will only be able to activate Tokenized or encrypted data with no another way left to unlock original contents. 


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