Which of the following is an example of tokenization?

Tokenization is a data security process where sensitive information is replaced with unique identification symbols (tokens) that retain all the essential information about the data without compromising its security. The correct answer, which involves replacing production data with a random number, embodies this principle effectively because it generates a unique token that references the original sensitive data, allowing for its use in systems without exposing or storing the actual sensitive information.

This method is advantageous for enhancing data security, particularly in scenarios involving payment processing or handling personal information, as the original data can be securely stored separately. Random numbers or tokens do not reveal any information about the original data, significantly reducing the risks associated with data breaches.

Other methods such as masking, encryption, or directly altering data formats do not meet the strict definition of tokenization. Masking alters the representation of the data but still allows for potential reverse-engineering. Encryption transforms data into a format that requires decryption to access original details. All these alternatives have distinct roles in data protection but differ fundamentally from the tokenization process that relies on creating non-sensitive equivalents of sensitive data.