A company uses 'Tokenization' to protect credit card numbers. How does this differ from Encryption?

Answer options:

Tokenization uses a key to scramble data; Encryption does not.

Tokenization is reversible using a mathematical algorithm; Encryption is not.

Tokenization is only for passwords.

Tokenization replaces sensitive data with a non-sensitive substitute (token) that has no mathematical relationship to the original data.

How to approach this question

Encryption = Math (can be reversed with key). Tokenization = Map (needs the lookup table). Hashing = One-way (cannot be reversed).

Full Answer

D.Tokenization replaces sensitive data with a non-sensitive substitute (token) that has no mathematical relationship to the original data.✓ Correct

Tokenization replaces data with a random string. Unlike encryption, which transforms data using an algorithm and key, tokenization relies on a database mapping. If the token is stolen, it cannot be reversed to reveal the original data without access to the secure token vault.

Common mistakes

Confusing Tokenization with Encryption.

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