Steemit Crypto Academy Contest / S12W4 - Tokenization.

It is another great week in steemit crypto academy. Blockchain has opened the way to so many concepts and possibilities. It has modernized or transformed so many ways of doing things into simple processes, without those things losing its value.

Same is true of objects. Recently, there are things like Internet of things, where furnitures, fixtures, even house security is remotely controlled. This makes it easier to monitor and operate the objects in our homes.

Data security is not exempted from these developments. So this week's crypto academy contest is focused on data tokenization.

What is data tokenization and how does it work? Give your own opinion

Data tokenization is simply the process of changing or substituting an important element or data with one that does not have any value. That one that does not have any value is referred to as a token.

An example of this is the credit card, where it's information is transferred, stored and processed with the token without exposing the original data.

Another area it is being applied is in social media accounts. Account owners can decide to tokenize their presence online migrating from one media platform to the other while having absolute ownership of their personal information.

It is also being used in the financial sector to protect and conceal payment information. For example, the ATM cards we use, number token generated by token devices when doing online transfers.

How does it work

A close example of data tokenization can be seen with the token devices we are given by our banks. Our sensitive information is generally stored and secured in the banks online vault.

Assuming we want to perform a transaction which may be a transfer, after entering the details of the transaction on the web page, to ensure final execution of the transfer, the system will require a set of random numbers generated by the token devices. Most at times, the token numbers are even used to give you access to the account to start initiating the payment transaction. Without it, your account details will not be made available to you.

	this is my Guaranteed Bank token device

That token device is unique, only associated to your account. It is the only authority to finally execute the transaction. Entering the random numbers generated by the token device, gives the banks online vault access to carry out any form of transaction on your account. Thus it also have limited time to which particular token numbers can last to ensure further security on account transaction.

Once the token numbers are entered, the online vault automatically knows the customers account details, information and account balance and would immediately execute the transaction having been given the authority to do so by the use of the tokens.

So even when a person knows your name, with out the token device and the randomly generated numbers being used, no transaction will be carried out.

The use of the token generated numbers is used to authenticate whatever transaction that takes place on your account. It shows you are the owner.

So from the above example, we can deduce the following as to how it works.

° First, there must be availability of data which is provided to the organization responsible for the tokenization.

° Secondly, The company confirms the sensitive data received, creating a token which is unique to that data.

° This token is then given to the individual replacing the original data.

° Whenever the individual wants to use the data, he provides the token to the third party organization instead of his data.

° The third party organization will then relate with the organization who provided the token to confirm it's validity.

° The provider of the token will then confirm how genuine and valid the token is.

° Finally, the their party organization after confirming validity of the token, authenticates the transaction of the individual, the owner of the token.

How important is data tokenization? Give your own opinion.

Data tokenization is very important considering the level of personal information theft that are everywhere. We see many peoples' financial information being stolen, hackers stealing investors assets, nfts and the rest.

Hence, data tokenization should be an important way of ensuring security and protection of private information. It is an important way if not the only step of handling data breaches. So for any person who loves data handling convinience and security, tokenization is key.

Benefits and limitations of data Tokenization.

There are several benefits of data tokenization.

• it helps to protect against data breaches. Many financial criminals have card organizations as their primary target because of the high level of customer payment information they keep.

So applying data tokenization makes it almost impossible for them to have access to important personal information even in the case of data breach. This also helps reduce the financial loss which may arise due to lawsuits.

• It enables businesses to manage the amount of data that are subject to compliance obligations.

• It has improved more security in the e-commerce sector. Security of consumers information is paramount in e-commerce. So tokenizing consumers information and cards enhances the data security, thereby protecting buyers actual information.

• It makes identification of individuals or persons very easy in some institutions like the banks, hospitals, etc just with a four digit identification.

Disadvantages

° The quality and accuracy of data might be distorted in the process of tokenization

° Tokenization will also hamper interoperability of data. This is because it will not be easy for the different system or organizations processing the data to share it with others. They will term it to be exclusively their property and to avoid data leakages in the process of sharing.

° There will be a struggle on who maintains control over the data and who determines how it is to be used or shared between the owner of the data and the tokenization firm.

° It can be difficult to recover tokenized and original data when the system fails.

Are Tokenization and encryption the same thing? Explain your answer, giving a practical example.

Both data tokenization and encryption are both techniques of ensuring security of data. However, below are major differences of both.

• One of the differences between the two is that tokenization does not change the content, length and type of the original data making it legible, while encryption does.

• Encryption requires a key to convert the illegible content to a readable form while tokenization uses a set of data which does not relate to the original data to substitute for it.

• Data encryption can be used for both structured and unstructured data, while tokenization is basically meant for structured data fields.

• Tokenization require the web and online connectivity to be used while encryption work both offline and online.

• For an encrypted document, the original document can be transferred to another place but for tokenization, the original data cannot be transferred out from the organization.

• An encrypted document or data can be shared among various organizations while tokenized data cannot be shared at all. This gives an upper hand to tokenized data in terms of data security.

These are some of the differences between data tokenization and encryption.

A practical example is when a government agency have a top secret information which can only be seen by top personnels. The information can be encrypted, stored in a flash drive and can then be transferred either online or offline to the intended personnel. The personnel would now use the encryption key or specialized decryption software to decrypt it to see the information in plain and readable language.

This is not applicable to tokenized data.

Steem and Tokenization, what are Smart Media Tokens? Give your own opinion.

Smart Media token is a native token on the steem blockchain that can be created and launched by anyone to help the person monetize his online contents while also benefiting the users of the content.

It is specifically designed to create a reward system for digital content businesses, basically powered by Proof of Brain.

This SMT is designed for content writers and their communities. It helps the content writer to earn from his publications while driving the growth of his platforms via these incentives.

Apart from monetizing his work and creating incentives for his community, the writer can also use it to raise money via Initial coin offering (ICO).

The beautiful part of it is that the writer do not need to be a crypto or Blockchain expert to do all these. All these are already embedded on the steem Blockchain. All that is needed is the initial setup during registration, supplying the needed details required for such token creation.

Below is what the initial setup looks like.

Source

This is a part of data tokenization supported by the Steem Blockchain.

Conclusion

Data tokenization is very important in further development of online earning and web3 development.

It enables the transfer and processing of data in a very secure way. Protecting peoples data is paramount to the success of any database organisation.

@sahmie @khursheedanwar and @yancar, please take a look and make your entry in this week's crypto academy engagement topic here

Success to you all!