What is a Hard Token? Hardware Security Tokens Vs Soft Tokens

In the past, passwords alone were considered an effective security measure for protecting user accounts and deterring cybercriminals. Motivated by the increased threat of data breaches and other cyber attacks, the cybersecurity industry has since evolved from relying on passwords to favoring more robust authentication methods, such as multi-factor or two-factor authentication (2FA).

Multi-factor authentication (MFA) systems utilize a combination of passwords and tokens to verify a user’s identity. These systems also require an authentication device to transmit access requests and collect user information. Some authentication systems utilize a user’s mobile device, while organizations maintaining strict security protocols require designated hardware tokens.

Keep reading to learn more about hard tokens, the difference between hardware and software tokens, and the various types of hardware tokens your organization can utilize to defend its accounts and information technology (IT) systems.

Hardware Vs. Software Tokens

a decorative image expressing the difference between hard tokens and soft tokens

Hardware tokens or hard security keys are hardware devices that utilize encryption algorithms, one-time passwords (OTP), time-based one-time passwords (TOTP), authentication codes, biometrics, or a secure PIN to complete 2FA or MFA requests. On the other hand, soft tokens are software installations, like a mobile app, that fulfill the same purpose.

Security professionals consider hard tokens safer than soft tokens because cybercriminals cannot bypass physical devices simply with an internet connection. In most cases, an individual would need to physically steal or replicate a hard token to infiltrate an organization’s security system.

Types of Hardware Tokens

Hard tokens come in various forms, but there are two main types: connected and disconnected tokens.

  • Disconnected tokens: This is the most common type of hardware token. These devices do not need to be physically connected to an intended device to carry out authentication requests, as they include a small screen users can use to input credentials and request access.
  • Connected tokens: Less common than disconnected tokens, these devices need a physical connection with an intended device to transmit and transfer user data. These types of hard tokens require host input services to be installed on the intended device and include USB tokens, Bluetooth tokens, electronic key fobs, and smart cards (ex, Yubikey)

Generally, both types of hardware tokens come as small devices that users can clip on a keychain or otherwise easily transport.

How Does a Hard Token Work?

Within organizations that utilize hard token security systems, hard authentication tokens are typically distributed to users by IT personnel. Security officers will then register these devices to a user, and the security system assumes that only authorized users have access to a registered hard token. Therefore, the system allows anyone with the hard token and the accepted credentials to access the organization’s accounts, operating system, information, or workspaces. 

Electronic keycards are a standard hard token security system organizations utilize for daily use cases, such as granting employees access to company offices or workstations. Suppose an electronic key card user must enter a PIN or passcode after presenting their key card. In that case, that organization utilizes a two-factor authentication system with a single hard token.

Similar to the teeth of a traditional house key, most hard tokens possess a unique digital signal or code signature. These unique structures ensure that a hard token can only interface with a security system constructed to receive such signals or codes.

Pros and Cons of Hard Tokens

decorative image expressing the pros and cons of hardware tokens

Hard token authentication systems possess substantial security benefits. However, like any security system, there are also disadvantages to using hard tokens.

Advantages of Hard Tokens

Organizations that utilize hard tokens do so for various reasons, including added security benefits, the ease of managing a more significant number of users and personnel, and the ability of hard tokens to secure physical locations.

  • High security: Unlike software that can be corrupted by cybercriminals using an internet connection, hardware tokens reside in the physical possession of their authorized user. A malicious individual would need to steal a user’s token to corrupt the organization’s security system
  • Easy to manage users: Large organizations often utilize hardware tokens for the ease of managing users and the speed at which access levels can be updated and deleted
  • Effective at securing physical locations: One widespread use case of hard tokens is securing physical workstations or corporate headquarters. Hard tokens, such as smart cards and electronic key fobs, do not require an internet connection or battery life to grant users access

Disadvantages of Hard Tokens

While the advantages of hard tokens outweigh the disadvantages in most use cases, it’s still important to discuss the flaws of installing a hard authentication system. The primary deficiencies of using hard tokens include cost and the propensity for data breaches to be more severe when they occur within a hard token authentication system.

  • Expensive: Hard tokens can be costly, primarily when an organization has many users. Organizations looking to install a hard token security system will need to pay to have the security system installed, complete periodic software maintenance, and purchase additional hard tokens when onboarding new users
  • Severe data breaches: Hard tokens are more difficult to steal or replicate than soft tokens. However, when compromised, hard tokens can present severe security breaches. Most hard tokens grant a single user access to multiple systems or workstations. Therefore, if a hard token falls into the wrong hands, that individual would now have access to organizational systems and information

Hard Token Alternatives

Security personnel are generally fond of hard tokens for their security benefits. However, some organizations seek safe and inexpensive alternatives, given the cost of setting up a new hard token security system. One popular hard token alternative is phone-as-a-token authentication.

Phone-As-A-Token Authentication

Phone-as-a-token is an authentication method that allows users to utilize their mobile phones to prove their identity and achieve authorized access. This type of authentication system represents a hybrid between hard and soft tokens, given that the user must use a physical device and a third-party authentication app.

Duo Security is an example of a mobile app that provides IOS and Android users with passwordless authentication options. This application and similar alternatives utilize MFA through biometric fingerprints, OTPs, and secure authentication codes.

The main disadvantage of phone-as-a-token-authentication is that smartphones contain an operating system constantly connected to the internet. This system can become vulnerable when users fail to complete timely security updates or securely protect their devices from theft.

Why is Multi-Factor Authentication Important?

An organization’s cybersecurity and IT security systems are only as effective as each of its parts. In other words, if one part of an organization’s security system is flawed, the entire system is susceptible to attacks and breaches.

MFA is necessary because it allows an organization to develop a baseline of robust security practices. Getting all users to utilize MFA is critical as it can improve an organization’s cyber hygiene and overall security.

How Can UpGuard Help With Cybersecurity?

Organizations concerned with hard tokens, MFA, and phone-as-a-token authentication will also want to consider the security benefits of using a comprehensive cybersecurity solution like UpGuard to manage risks across their external attack surface.

UpGuard allows organizations to understand what risks are affecting their security posture, improve their reputation, and monitor the cyber hygiene of their entire supply chain.

UpGuard BreachSight is an external attack surface managing solution that includes easy-to-read risk profiles, continuous monitoring, data leak detection software, and 24/7 notifications that alert users of new vulnerabilities, phishing attempts, potential typosquatting, and other cyber incidents that could affect business operations.

Interested in learning more about UpGuard BreachSight? Start your free trial today.

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