Tokens have become a major buzzword these days and are often mentioned in the same breath as digital identity, cryptocurrency, and NFTs. At Prove, tokens play an integral role in what we call PIN – the platform that powers all of our solutions. But what are tokens and how do they work?
The dictionary defines a token as “something serving to represent or indicate some fact, event, feeling, etc.” The subway token, to use a simple but iconic example, was used in New York City until 2003 to indicate that a rider had paid their fare.
Within the digital context, tokenization is the “process of exchanging sensitive data for non-sensitive data called tokens that can be used in a database or internal system without bringing it into scope.”
While Prove’s tokens are a bit more powerful and complex than the trusty subway token of yesteryear, comparing Prove’s digital token with its analog predecessor is a great way to understand the fundamentals and the current industry-wide movement toward tokenization.
Privacy-Enhancing
Today, many riders on the MTA pay for subway fares with a tap of their credit card. Historically, however, the subway token provided folks with a more anonymous way to ride the rails. Because every token was identical to one another, it was impossible to trace a specific token to a specific rider.
Like the subway token, Prove’s digital tokens are also privacy-enhancing because the information they contain can only be used after the owner has proven themselves with the encrypted SIM card in their phone. This gives the end-user the ultimate power to decide what parts of their identity they want to share and what parts they want to keep private.
The privacy-enhancing nature of tokenization is great for people who do not want their data used without their knowledge and it’s one of the big reasons why cryptocurrency and NFTs are becoming so popular.
Accelerates Onboarding
If you’ve ever taken a public bus on a transit system that still accepts cash payments, you know first-hand how much longer it takes for one passenger to pay their fare with loose change than it takes for another passenger to pay with their Metrocard, credit card, or even bus token. The token was a powerful technology because it greatly reduced the amount of time it took to collect fares and onboard passengers.
Prove’s tokens also accelerate onboarding but in a digital sense. Let’s say you want to apply for a loan. In a typical flow, that means filling out paperwork and entering a lot of personal information (name, DOB, SSN, etc.) Powered by tokens, however, Prove Pre-Fill takes the data entry out of the process and typically just asks you to enter one piece of information (the last four digits of your SSN). This saves you time and energy and actually reduces fraud in the process.
If you’re tired of constantly undergoing authentication and verification processes while surfing the web, you are not alone. Fortunately, tokens will become integral to Web3, removing the weak and ineffective security siloes that have been a major driver behind the terrible UX of today's modern digital life.
Reusable
In their heyday, subway tokens were reusable because they operated within a closed-loop system and could be sold to passengers again and again.
Prove’s identity tokens are truly reusable because you can leverage them on multiple platforms. For example, you can leverage a token to Pre-Fill an application for a crypto wallet and, later in the day, request a credit report.
Because you present the same reusable token across Prove’s network, you can take advantage of previously earned trust from prior events. For example, the trust earned by successful onboarding into a crypto wallet can be leveraged to accelerate the request of the credit report later in the day. This can power faster experiences for legitimate users while fraudsters with burner phones will be denied access at the front door.
Conclusion
While its predecessor, the simple subway token, is now largely delegated to the dustbin of history, Prove identity tokens will continue to be a powerful tool to protect privacy, accelerate onboarding, and reduce fraud in the future.
To learn more about Prove’s identity solutions and how to accelerate revenue while mitigating fraud, schedule a demo today.
Keep reading
Developers know identity verification is an essential element of effective digital onboarding and the customer lifecycle. Choosing the right one can feel like navigating a maze of features and complexity.
In an age where our smartphones have become almost like extensions of ourselves, the identity assurance achieved through smartphone possession and data is a natural evolution.
Rodger Desai, CEO of Prove, a leading identity verification solution provider, offers a unique perspective on the rising fraud in the gig economy, advocating for robust digital identity verification as a key defense mechanism.
