# Blockchain and the Tokenization of the Individual: Societal Implications
## 2 Tokenization and Encryption  
Digital transformation, \"high tech\" including AI and blockchains, has provided a multitude of opportunities for organizations to innovate by creating a leap in buyer value and delivering increased efficiencies across a wide cross-section of buyers. Individuals and businesses have therefore benefited tremendously from this transformation, but have also become susceptible to security threats and cyber criminality. In a study conducted by the Verizon Business RISK Team, more than 280 million payment card records were breached in 2008 [3]. The global financial market collapse not only created economic headwinds of unprecedented proportions, but also some of the largest data breaches in history also occurred in the same year. In fact, the study confirmed that if reasonable security controls had been in place at the time of the incident, the breaches could have been avoided in their entirety. Compliance to security standards is a resource-intensive challenge to all businesses irrespective of size. Despite the enormous efforts and vast expenditure of businesses to secure their data, hundreds of millions of records have been breached and continue to be. For instance, in 2008, the Verizon Business RISK team highlighted that retail, financial services and food and beverage accounted for three-quarters of the 2008 breaches. The majority of the records were compromised from servers and applications [3]. In 66 percent of the cases, the breach involved data that the organization did not know existed on their servers. Data breaches have continued to plague numerous industries since 2008. In 2018, an unprecedented number of breaches occurred, varying in severity. Hacking groups injected malicious code into poorly-secured web pages of British Airways, which exposed the data of 380,000 customers, and in India, an ID database managed by the Indian Government was compromised, exposing the identity details and private information of 1.1 billion individuals [4]. Two technologies utilized in the protection of data is encryption and tokenization. Tokenization and encryption are often mentioned together, and their definition is used interchangeably. While both are utilized as data obfuscation technologies, there are clear distinctions between the two. Both technologies can be utilized to secure data under varying circumstances, and in some instances, such as end to end payment facilitation, both encryption and tokenization are used together. Encryption is the process of using an algorithm to transform plain text information into a non-readable form called ciphertext. An algorithm and an encryption key are required to decrypt the information and return it to its original plain text format. In symmetric key encryption, the same key is used to both encrypt and decrypt the information. In asymmetric key encryption, two different keys are used for encryption and decryption. Therefore, the private key can decrypt messages sent to an individual, but cannot decrypt what is sent to another part, as that is encrypted with another key pair. Today, secure sdk encryption is commonly used to protect the information as it is transmitted on the Internet. Using the built-in encryption capabilities of operating systems or third-party encryption tools, millions of people encrypt data on their computers to protect against the accidental loss of sensitive data in the event their computer is stolen. Data encryption can be expensive and a resource-intensive proposition. Tokenization, on the other hand, is the process of converting a piece of data into a random string of characters known as a token. Tokenization protects sensitive data by substituting non-sensitive data. The token serves merely as a reference to the original data, but cannot be utilized to determine those values. A credit card number, for example, is replaced within the merchant's storage environment by a token value generated in such a way that it cannot be linked back to the original data element [5].