A security token is a portable device that authenticates a person's identity electronically by storing some sort of personal information. The owner plugs the security token into a system to grant access to a network service.
Single sign-on services also use security tokens to seamlessly log users into third-party websites. Disconnected tokens are not linked to the computer or network in any way; rather, the user enters the information from the token manually into the system. Connected tokens work electronically and automatically transmit information to the network once they're connected. Security tokens are considered to be a more secure way to access a sensitive network system such as a bank account, as they add an extra layer of security.
They may be used in place of or in addition to a password to prove the owner's identity. Security tokens store data in order to authenticate the owners' identities.
Some store cryptographic keys, a system used in cryptocurrency services such as Bitcoin, but the key must be kept secret. Some use time-sensitive passwords, which are coordinated between the token and the network and reset at constant intervals. Others use biometrics such as fingerprint data to ensure that only the owner of the security token can access protected information.
As with any system, security tokens are not flawless. If the token is lost or stolen or if it isn't in the owner's possession, it cannot be used to access a service.
However, the owner can take steps to prevent loss or theft, such as locks or alarms, and the token can be rendered useless to a thief by using two-factor authentication, which requires both an item in the owner's possession for example, a bank card and a piece of knowledge for example, a PIN number to access the token. Security tokens can also be hacked. This often happens when the owner unknowingly provides sensitive information to an unauthorized provider who then inputs the information into the secure network.
This is known as man-in-the-middle fraud. Any network connected to the Internet is vulnerable to such an attack. Dictionary Term Of The Day. How much a fixed asset is worth at the end of its lease, or at the end of its useful Broker Reviews Find the best broker for your trading or investing needs See Reviews. Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. A celebration of the most influential advisors and their contributions to critical conversations on finance.
Become a day trader. How Do Security Tokens Work? Weaknesses of Security Tokens As with any system, security tokens are not flawless.
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