Hard token vs. soft token: What’s the difference?

While we’re down from a mid-pandemic high of hundreds of millions of cybersecurity breaches, 2023 still saw over 40 million user accounts exposed worldwide. So there’s still work to do for organizations that want to protect customer and internal data.

The best protection involves the best cybersecurity tools, and there’s a debate raging over whether hard tokens or soft tokens are the superior choice. While both serve the noble purpose of safeguarding digital assets, understanding their distinct functionalities and applications can significantly influence your security strategy.

Keep reading to learn more about the pros and cons of each kind of token so you can make informed decisions that align with your organization’s operational dynamics and security ethos.

What is a hard token?

A hard token—or hardware token—is a physical device used to gain access to a secured network or system. It’s a form of two-factor authentication (2FA) that requires the user to possess the token in addition to knowing a password or PIN. Common examples include:

• USB devices
• Key fobs
• Smart cards.

These tokens generate a unique, one-time-use code that users enter alongside their password to authenticate their identity.

How hard tokens work

In most hard token security systems, a hard token is issued to a user. The security system then assumes that if the hard token is present, the person in possession of the token must be an authorized user. So it allows anyone with that hard token to access the system.

If you’ve ever used an electronic keycard to open a door or a gate, that’s a hard token security system. If you had to present your electronic keycard and enter a personal security code, that’s a two-factor authentication system that uses one hard token.

Most hard tokens use some sort of digital signal or signature to make each token unique. Keycards and keyfobs usually use a unique radio signal. USB keys often have an encrypted digital signature.

These digital signals and signatures are similar to the teeth of a traditional key. Each digital signal or signature only interfaces with security systems that have been built to recognize and unlock for hard tokens that have that signal or signature.

Ultimately, hard tokens have a strong security design. But it’s important to weigh their downsides along with their advantages to decide what form of security is best for you.

Pros and cons of hard tokens

Here’s a quick overview of the benefits and drawbacks of hard tokens:

Pros

Enhanced security

You can’t easily duplicate hard tokens, making them a strong line of defense against unauthorized access. They’re also difficult to remotely breach and easy to isolate from the public internet, minimizing their attack surface.

Physical control

Needing to have the token physically on hand adds an extra layer of security.

Durability

As physical devices, they’re designed to be durable and long-lasting.

Cons

Cost

Hard tokens can be expensive to purchase, distribute, and maintain—especially for large organizations. If they get lost, they need to be replaced. And adding new users to the system can be complex and even more expensive.

Inconvenience

Carrying a physical device can be cumbersome and poses a risk of loss or damage.

More severe breaches

Although it’s more difficult to steal or replicate a hard token, a stolen hard token can cause a more severe security breach. Most users will have a single hard token that provides access to multiple systems. One compromised hard token often compromises multiple systems.

Despite their associated costs, hard tokens can be an ideal security method if you need a highly reliable security system that can work even if there’s no network connectivity or a high-security system that requires network isolation to prevent remote attacks.

What is a soft token?

Soft tokens, also known as software tokens, are digital versions of hard tokens that generate a one-time passcode used in two-factor or multi-factor authentication (MFA). They’re typically apps installed on a mobile device or computer, eliminating the need for a physical device.

Soft tokens synchronize with the server to provide a dynamic passcode that users combine with their traditional login credentials.

How soft tokens work

Soft tokens rely on supporting security systems and limited use for security. When a user attempts to log into a digital asset, the security system will generate a soft token and send it to the user.

Most soft tokens use a secondary device or account for delivery. Usually, a soft token will be sent to a user’s phone via SMS or email. The user must enter the code or click the link they receive to finish the login process.

Once the soft token has been used, it can’t be used again. A new soft token must be generated each time a user attempts to log in. This process makes soft tokens more challenging to exploit, even if a bad actor gets hold of a soft token.

Additionally, the secondary device or account provides additional security, since the user must have access to their email account or device to receive the soft token. This delivery system offers an additional layer of security to soft token-secured systems.

While there are many upsides to using soft tokens, you should also consider their disadvantages before making the right choice for your organization’s unique security needs.

Pros and cons of soft tokens

Here’s a quick overview of the benefits and drawbacks of soft tokens.

Pros

Convenience

Soft tokens are easily accessible through personal devices like smartphones, making them user-friendly. They also add very little complexity to the login process, making them less susceptible to security breaches caused by authorized users failing to follow security protocols.

Cost-effective

They’re generally less expensive to deploy and manage compared to hard tokens, and they require relatively little modification of your existing security system.

Scalability

Soft tokens can be quickly distributed across a large user base with minimal logistical challenges. Their systems are typically much lower maintenance than hard token systems because you can add new users and generate tokens on demand.

Cons

Security risks

Since they rely on software and network connections to work, they’re more susceptible to remote cyber attacks through an internet connection.

Dependence on devices

Users must have their device on hand and charged, potentially limiting access in certain situations.

Software maintenance

Regular updates and maintenance are required to ensure the software's security integrity.

Even though soft tokens aren’t an impenetrable security system, they’re a huge security upgrade over simple passwords. Their convenience and cost-effectiveness make them a wise choice for organizations looking to add layers of security to their systems.

With all that in mind, it’s time to consider whether hard tokens or soft tokens are best for your needs.

Hard token vs. soft token: How to make the right choice

The decision between hard tokens and soft tokens depends on several factors, including the level of security required, budget constraints, user convenience, and the specific use case. For environments demanding the highest security levels, hard tokens may be preferable despite their cost and inconvenience. For more dynamic and cost-sensitive environments, soft tokens offer a practical and efficient solution.

Here’s a quick decision-making guide to help you choose which is best:

Use hard tokens if…

Your security system secures physical locations.

Hard tokens are great for keyed entry. You can use the same hard token to access digital assets if you need to secure both digital and physical resources.

You need top-tier security.

Organizations that need near-perfect security—like Department of Defense contractors—should adopt some form of hard token security.

Your organization has a lot of resources to invest in security.

Cost is the biggest limiting factor in using hard tokens since they’re expensive to implement and maintain. Your organization will need a fairly substantial security budget to support hard token security.

Use soft tokens if…

You primarily need to secure digital assets.

If your security system mostly protects user accounts and electronic systems, soft tokens are an ideal option. Soft tokens integrate easily with most digital security systems. And they’re easy enough to use that most users won’t notice the additional security measures.

You need a very cost-efficient security system.

Soft tokens are far less expensive to implement and operate than hard tokens. If you need the security of 2FA without the cost of security hardware, use soft tokens.

Choose the option that will level up your security

In the debate between hard tokens and soft tokens, there’s no one-size-fits-all answer. Each has its strengths and weaknesses, and the optimal choice varies depending on specific requirements and contexts. By carefully evaluating the benefits and drawbacks of each, organizations can implement the most appropriate authentication method to safeguard their digital assets effectively.

Regardless of which method you use, adding hard tokens or soft tokens will upgrade your security system to at least two-factor authentication. That’s a huge security upgrade from simple password protection. As long as you choose a token and start using it, you’ll be making the right choice.

If you’re leaning toward soft tokens, you can use Telnyx Verify API to build your own authentication program. Leveraging the secure global Telnyx network, you can send passcodes and other authentication information to users via SMS or voice.