Steemit Crypto Academy Contest / S12W4 – Tokenization.

Good morning 🌄

Greetings to you all!
Tokenization is a very vast topic to discuss. There would be different informative questions that I am going to answer while sharing my participation in this engagement challenge.

What is Data Tokenization and how does it work? Give your own opinion

Data tokenization	Data tokenization is one of the most important process that is used by taking original data and then transferring that data in the form of tokens that have no inherent meanings so basically it is a protection for sensitive information by its replacement with token which is a unique identifier for original data.

If there are unauthorized parties that want to access sensitive data of someone and if it is secured by data tokenization method then they cannot access sensitive information of anyone. Due to data tokenization it is very definite to know that risk of exposing of sensitive information to others significantly minimize that's why it has a significant importance in this digital age where there are different cyber attackers that want to breach data and it is increasing day by day.

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Data tokenization working

There are different methods used for data protection but data tokenization is one of the best method from all of them because tokens that are created are meaningless and they cannot be reverse-engineered for revealing of original data. In this way it becomes very difficult for hacker to hack any sensitive information even if they obtain tokens.

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Data tokenization is a method that permits securing storage and then transferring of sensitive data that's why tokens are stored and transmitted hence risk of sensitive data breach becomes less that's why it is also said that it is significantly important and useful for organizations that are responsible for handling large volume of sensitive informations like financial institutions etc.

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There is an organisation which is general data protection regulation in European Union so data toknenization can help organisations like this by complying with regulation of security of data and by the replacement of sensitive data with tokens organizations can reduce scope of their data protection responsibilities and simplifying the compliance efforts.

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Data tokenization cannot be a solution for all the problems and it is just implemented as a solution for data security strategies which also includes other measurements like encryption and access controls. Organizations are responsible for giving guarantee that tokenization process is correct or not and tokens are adequately protected or not.

How important is data tokenization? Give your own opinion

If we are searching out for comprehensive data security strategies than most vital significant and important as well as crucial component in my point of view is data tokenization in today's digital world which is responsible for enhancement of securing data or sensitive information of others by the reach of unauthorized access.

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Now a days organizations have high need robust measures for protecting sensitive data in this increasing prevalence of data insecurity by cyber attackers. When data is stored and transmitted in the form of tokens by the process of data tokenization then it provides effective alternative for protection of data and these tokens have no inherent meaning also. Anytime if there are cyber attacks who want to attack sensitive data of someone then they would not be able to hack sensitive data of someone even if they have access to tokens.

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Risk of data exposure to others also minimize to a great extent by the process of data tokenization. When sensitive data is replaced by tokens then organizations reduce likelihood of unauthorized access to sensitive and valuable data of others and it is important for those industries that handle sensitive data at high extent or high volume.

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In the process of data tokenization we can also obtain sum of the benefits like compliance with security of data regulations because there are many countries that have implemented strict rules for the protection of data like GDPR in European union about which I have already talked about in above question. By the reduction of scope of sensitive information that needs to be protected , data tokenization is a way that supports organisation to meet these requirements. In this way it mitigates the risk of non-compliance penalties and simplify compliance efforts.

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Where there is a need of data to be shared with third parties or to be transmitted over insecure networks there is a need of data tokenization which enables secure storage and transmission of data because tokens are stored and transmitted which reduce the risk of sensitive information compromising. Organizations in this way guarantee about integrity of data throughout its life cycle.

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It is important to understand that as a standalone method or solution data tokenization should not be seen because it is just a part of comprehensive data security strategy which also include other things like encryption,access controls etc and in addition organizations are also responsible for ensuring the implementation of tokenization process in correct way.

Benefits and limitations of data Tokenization

Let's have a look at some of the benefits of data tokenization.

1. Enhanced Data Security:

Data organization is beneficial in the enhancement of data security then it replaces sensitive information of others by randomly generated tokens and making it much difficult for unauthorized individuals as well as hackers to access original data and even if someone steals data then stolen tokens becomes meaningless without corresponding mapping information.

2. Minimized Risk of Data Exposure:

Minimizing the risk of data exposure is another potential benefit that we can obtain by the process of data tokenization. Scope of sensitive data that need protection is minimized when it replaces sensitive information with tokens. It mitigates potential impact of data breaches and reduce hackers access to sensitive information.

3. Simplified Compliance with Data Protection Regulations:

Simplified compliance with data protection regulation is another potential benefit of data tokenization method. It can help organizations compliance with these regulations by the reduction of amount of sensitive information which needs protection and in this way compliance efforts simplifies and non compliance penalties risk reduces.

4. Secure Storage and Transmission:

Data tokenization promotes secure storage and transmission of sensitive information or data when only tokens are stored and transmitted and tokens ensures that sensitive information of others would remain protected and it is much valuable when you are sharing data with third parties and transmitting it over insecure networks.

Let's discuss now about some of the limitations of data tokenization method.

1. Loss of Data Context:

During the process of data tokenization there is a loss of original context of data and it means that tokens would not be able to provide any meaningful information and then it would be challenging to perform data analysis and processing task which requires original sensitive data.

2. Increased Complexity:

After that data tokenization method implementation there is increase complexity in management of organization:s data processes because there is a requirement of development and maintenance for mapping mechanism so that they may associate tokens with their corresponding original data and there could be the requirement of additional resources for this purpose.

3. Impact on Performance:

Due to data tokenization method implementation there is also a great impact on the performance of system by generating and managing tokens as well as performing tokenization and detokenization processes which can also introduce additional processing overhead so there is a need to carefully consider performance implications by organizations in this way.

4. Potential for Token Theft:

It is true that data tokenization is a process for enhancing data security but if tokens are stolen then there is a risk that hackers can reverse-engineer the mapping information or use any other analysis for the deducing the original sensitive data. So due to this reason there is a need for the implementation of robust security measures by the organization for the protection of tokens.

Are Tokenization and Encryption the same? Explain your answer, giving a practical example

Tokenization and encryption both are very crucial for data security but they are not same terms they are totally different so let me explain the difference between both of them.

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I would write an imaginary credit card number that is mine and I want to protect it so now let's discuss that how it would be protected by the method of data tokenization and how it will be protected by the method of encryption.

Encryption methodology

If my credit card number is "1234 5678 9012 3456," that I want to protect by encryption then it would involve scrambling of original data by the use of mathematical algorithm and secret field for the creation of ciphertext so ciphertext could only be decrypted back into original data by using a key so if we would encrypt this credit card number that I have explained above then it would be something like this in the form of;

"qweRtYuiOhdgkkFgfDsA1234567890zxcvbnm."

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Data tokenization methodology

If my credit card number is "1234 5678 9012 3456," that I want to protect by data tokenization then it would involves the replacement of sensitive data with a token which would be generated randomly. Token might look like this;

"TOK123456."

Token vault is a special term that is basically a mapping between token and original data securely storing in a separate system.

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Encryption	Data tokenization
Encryption retains original data format but without decryption key it becomes unreadable to reach original format	Tokenization involves the replacement of actual data with just a token and then stores actual data securely anywhere else.

Practical scenerio

Consider that you are making an online purchase and at the time when you have to enter your credit card information at certain website then it seems to be very risky to you to transmit and store actual credit card number and you want to store and transmit it securely so now let's consider the encryption and tokenization role in it.

Encryption:

First there would be and encryption of my credit card number in the website by using a mathematical strong algorithm and storing the encrypted data in their database so when I have to make any purchase then that encrypted data would be transmitted to network for processing the payment and then decryption of data occurs by using the decryption key. After that payment would be sent further.

Tokenization:

My actual card number would not be stored by website and their would be tokenization process and a token would be generate in our random way and then actual credit card number would be secured in a token vault. After that when I have to purchase anything then website have to use token for processing transaction so token is meaningless if it have no access to token vault.

In the above practical example it is very clear that encryption is protecting my credit card number by making it unreadable without the use of decryption key.Tokenization is protecting my credit card number by replacing it with a token and storing my data separately and in a secure way.

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

Smart media tokens are one of the unique feature of steem blockchain which enables the creation and distribution of custom tokens at steem blockchain. Smart media tokens is one of the unique feature that is responsible for permitting writers or content creators as well as community is so that they may have their own tokens which could be used for rewarding other users in response of their good content as well as for the purpose of crowdfunding and for the creation of virtual economics also.

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In the world of blockchains and social media networks there is most exciting development which is smart media tokens because they give encouragement to content creators and community and give them ability so that they may be able to create their own token for the establishment of their own economics in blockchain ecosystem like steem. In this way creators of content can have more control over their monetization and content creation strategies.

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Smart media tokens are also potentially beneficial for posting more interaction engagement and collaboration in between the communities because by the creation of their own tokens communities can incentivies the participation and can reward their members for contributions so in this way smart media tokens can be a leading cause for more vibrant community experience.

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For crowd funding projects smart media tokens can also play crucial role and can provide new opportunities for these purposes because content creators can offer their tokens as a reward to those who are supporting their projects which creates a transparent way for crowd funding compaign to be occur. By democratization of funding process it can give more autonomy to creators over their projects.

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Smart media tokens success depends upon its adoption and usage by the communities and how much smart media tokens are valuable it all depends upon demand and utility they offer. That's why it would be very important for community and content creators that they may effectively promote and utilise their tokens for attractiveness of users and for building a thriving ecosystem.

I want to invite
@inspiracion
@ripon0630
@patjewell
@suboohi
***To participate ***

Have a nice day🤗