What is a Security Token?

Last Updated : 11 Mar, 2024

Let us imagine that we are been provided with just an ID and password to access any of our logins and if any stranger has seen it then it is obvious that they can see our data. This means our privacy has been compromised so we needed a way to overcome this issue so a security token was introduced in this issue. A security token is a way introduced to overcome such issues. It is an additional authentication process to detect the user login other than their user ID and password. It can be either OTP, a physical device etc. In this article, we are going to discuss Security Token, its Working, applications, advantages, disadvantages, etc.

What is a Security Token?

A security token is an additional layer of authentication that is used to access the user identity other than its login ID and password. A security token is a physical or wireless device that provides multi-factor authentication (MFA) for users to prove their identity in a login process. It is typically used as a form of identification by the user for access to a computer system.

The regular use of a security token can be understood as a two-factor authentication (2FA) we use commonly nowadays to access our emails or other official profiles. We just not need only our login id and password but also an encrypted code to access our login. A token can be an item or a card that displays or contains security information about a user and can be verified by the system. Security tokens can be used in place of, or in addition to, traditional passwords. They are not only used to access computer networks but can also secure physical access to buildings and act as electronic signatures for documents.

How Do Security Tokens Work?

A security token provides us with the authentication for accessing a system through any device by generating a password. This could be a smart card, USB key, mobile device or radio frequency identification card. The device generates a new password every time it’s used, so a security token can be used to log in to a computer or virtual private network by typing the password the token generates into the prompt. So, we can say that the user every time needs a new authentication way to log in other than their ID and password to log in. It depends on the user to choose the convenient type of security token to access their login.

Security token technology is based on the use of a device that generates a random number, encrypts it and sends it to a server with user authentication information. The server then sends back an encrypted response that can only be decrypted by the device. The device is reused for every authentication, so the server doesn’t have to store username or password information, making the system less vulnerable to hacking. The generated token is also for the limited time and the user also has the option to receive his login details on mail or text message. The user has multiple option to keep his login private and secure So, we can say it’s acts as a major security for the system and the user data both simultaneously.

Following process can take place to access a website with help of the security token :

The user opens the website and enter their user id and password.
The website checks the login credentials and if it’s correct then ask the user for the security token issued to him which can be used for Multi Factor Authentication.
Then the user inputs the security token available to him and sends it to the server to check.
The server verifies the token generated by him but if it correct, the user is given the access else it denies the access of the user.
Some websites are limited for a period of time and asked the user to complete their work in the particular time else the user is asked for the security token again to access the website and continue their work.

Types of Security Tokens

There is a large variety of security tokens that can be used by the user as their Multiple factor authentication (MFA) and secure their access. We all have different security tokens accessible to all of us to secure our login and data. Following are some different types of Security Tokens:

Connected tokens: It is a physical type of token that connects directly to a computer or sensor. The device reads the connected token and grants or denies access. It slide our hardware security token into a reader. It is the not seen commonly used but is highly secured security token. Examples : Key fobs, YubiKey etc.

Disconnected tokens: It is a form of digital security token that doesn’t connect physically or logically to a computer. We use the device to generate an OTP or other credentials. The desktop application sends a text message to a cellphone, which the user must input in the login, which acts as a disconnected token. It is the most frequently used token for multi-factor authentication (MFA). Examples : Pocket-size key fobs, mobile phones, and keyless entry systems etc.

One-time passwords (OTPs): The most common form of digital security token, OTPs are valid for only one login session and can’t be used again. After the initial use, the authentication server is notified that the OTP shouldn’t be reused. OTPs are typically generated using a cryptographic algorithm from a shared secret key composed of two unique and random data elements. One element is a random session identifier, and the other is a secret key. It is limited over a period of time and cannot be used after it expires. Examples : Smart cards, USB keys, Keyless entry systems, Mobile phones etc.

Contactless tokens: These tokens form a logical connection with a computer without requiring a physical connection. These tokens connect to the system wirelessly and grant or deny access through that connection. However we rarely used this type of security tokens but it safe and very useful. Example : Bluetooth (method for establishing a connection with a contactless token).

Programmable tokens: A programmable security token repeatedly generates a unique code valid for a specified time frame, often 30 seconds, to provide user access. After every 30 seconds, a new random token is again generated. Example : AWS Security, Microsoft Authenticator (application that generates 2-factor authentication codes required for IT administrators to access resources).

Single sign-on (SSO) software Security tokens: These SSO software tokens store the digital information, such as a username or password and then enables people who use multiple computer systems and multiple network services to log in to each system without having to remember multiple usernames and passwords. These are very useful in case a person uses multiple systems because it saves the time and makes it easier to manage multiple usernames and passwords across various accounts and services. Examples : Udemy and coursera uses the same types Security tokens.

Best Practice of Security Token

we can take the following steps to ensure that our security tokens are effective :

Begin due diligence by defining how the tokens are used and what level of functionality is needed.
Check out security token offerings from selected providers, and try devices out before making a decision.
The devices should be compatible with an existing security ecosystem, whether it is centralized or decentralized.
Perform testing before rolling out the tokens.

Application of Security Token in Cryptocurrency

The Security tokens play an important role in the function of cryptocurrencies and the blockchain technology they’re built on. In the crypto world, these tokens are used as digital assets that represent a certain value or utility. They are created and then distributed through initial coin offerings to its user, which are similar to initial public offerings in traditional financial markets. The creation of these tokens is based on the smart contracts, which are self-executing contracts with a set of predefined rules. These Tokens can be used by us to serve various purposes within a cryptocurrency ecosystem. They can be used as a means of exchange or as a store of value. The Investors may hold tokens, hoping that their value increases over time.

Tokens also have utility within a specific blockchain network. For example, in decentralized applications built on platforms like Ethereum, tokens can let it users to access and utilize specific features and services. These utility tokens grant users certain privileges or rights within the ecosystem, such as voting on governance issues or receiving discounts on platform fees.

Advantages of Security Tokens

Following are the some benefits of using the security token:

Increases the security: The use of these tokens makes it much harder for attackers to gain access, even if they steal a password. So, it seems they really don’t know anything about you even after knowing the access and are helpless.
Reduced risk of phishing: Moreover attackers aren’t available to obtain the secondary authentication factor easily, So phishing attempts are less effective or we can say almost useless.
Improved compliance: Many regulations and security requires the best practices and use of MFA, which security tokens can facilitate. So, nearly again another failure for them.
Uses a physical or digital identifier: It is unique to the every user so provide greater security and easy to use as well as very convenient.
Protects networks and digital systems: The trouble with passwords and user IDs is that they aren’t always secure as we think. Threating actors continue to refine methods and tools for password cracking, making passwords vulnerable. Password data can also be accessed or stolen in a data breach. In addition, passwords are often easy to guess, usually because they are based on easily discoverable personal information.

Disadvantages of Security Tokens

Following are some demerits or precaution needed while using security tokens :

Maybe Costly: Hardware based security tokens like Keyfobs or Yubikey are expensive, while software tokens are often free or subscription-based. Then the user might need to pay a amount to secure his authentication and secure the login.
It may not be user convenience: Some users prefer hardware tokens for simplicity, while others prefer software tokens for accessibility. So it may create a conflict on the user accessibility on some particular sites authentication.
Integration: We must need to ensure that the chosen tokens are compatible with our network infrastructure and authentication methods because it may stuck at a point.
Subject to loss and theft: A security token could be lost or stolen by an unauthorized party. If a security token is lost, stolen or damaged, it must be deactivated and replaced else it may lead to severe consequences. Example : an unauthorized user in possession of the token may be able to access privileged information and systems.

Conclusion

Security tokens are an important way to protect our identities and data from the cybercriminals. They give us an extra layer of login protection other than our username and password. Though tokens can be costly and hard to set up, the security benefits are more important. Tokens gives us unique passwords for each login session, which stops unknown access and hacking of our data. This allows us to work with different login systems easily. These tokens can exist in different forms like physical devices or digital codes. Overall, the use of token helps our data to be secured as well as protects the user privacy in our connected world.

Frequently Asked Questions on Security Token – FAQs