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What is a Security Token?

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A security token is a way to authenticate users and authorize access to digital resources or assets that are privileged or require personalized access. It offers an additional layer of security and is commonly used for multi factor authentication (MFA).

Security tokens contain long strings of random characters, making it complex and difficult to break. The tokens may be stored in a digital form or on a physical portable device.

Why are security tokens needed?

The most common type of security protocol for digital user verification is a password. We use passwords every day - for social media, email, ecommerce sites, bank portals and more. In general, the stronger the password, the better the protection it provides against hackers and potential misuse.

However, for a number of reasons, passwords are not always as secure as we need them to be. People use simple passwords - password123 being an infamous example. Or they repeat passwords on multiple sites, making it more risky. It’s no wonder that around 30,000 websites get hacked every year (source: Forbes).

Cloud services require strong access protocols to ensure that privileged information cannot be accessed by an unauthorized or fraudulent user. Any such access could result in tampering and leakage of confidential data, misuse of resources and financial losses.

Types of security tokens

Security token based authentication systems solve these common problems by generating and storing long and complex passwords or “tokens”. They might also contain additional information such as details of owner, server’s clock cycle etc.

These tokens might exist in digital or hardware form, similar to a wallet or a piece of paper carrying your password. However, they can connect to a computer via a direct connection through a physical port or wireless. This way, the password does not get displayed which makes the verification process much more secure.

The two categories of tokens are as follows:

  • Hardware devices: Smart cards such as those at subway stations, corporate units, flash drives or other portable dedicated hardware devices which can be used to store and communicate credentials.
  • Software devices: OTP (One Time PIN) generated and sent by applications when creating accounts or logging into services. They are only valid for one instance of authorization.

In addition, the tokens are also hashed or encrypted together with a signed message or a clock instance to make them even more secure.


  • Better than passwords: Security tokens are much less vulnerable to decryption or cracking, thus a much better addition or alternative to passwords and userIDs/usernames.
  • Timed tokens: They expire after a fixed time period, thus the potential damage caused by losing a token to theft is extensively reduced. These are also known as dynamic passwords while the regular ones we save for our accounts are known as static passwords.
  • Multi-Factor Authentication: Token based authentication can be used in addition to userID and password, this is known as multi-factor authentication. This method adds a reinforcement on online security and is considered as a top authentication protocol in public cloud computing. 


Security tokens can be lost and are vulnerable to theft. If someone else steals a hardware device they can access all of the victim’s data.

Even though tokens are extremely difficult to decrypt and hack, it is not theoretically impossible. It forms an additional layer but the security is never 100% guaranteed.


Security tokens are used to secure data and digital assets, it is a method which is more effective than passwords. Multi-factor authentication systems use both - passwords and tokens - simultaneously to strengthen security.

With Macrometa, you can swap sensitive information with tokens while preserving data format, learn more more today by chatting with a solutions expert.

Related reading:

Stopping Fraud at the Edge: How Hyper Distributed Cloud Platforms Can Help

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