Which statement describes tokenization?

Tokenization is a process in which sensitive data is replaced with unique identification symbols, or tokens, that retain essential information about the data's context without compromising its security. In this context, the statement that describes tokenization accurately states that it replaces data with a random string. This approach is particularly useful in scenarios where sensitive data such as credit card numbers or personal identifiable information needs to be protected while still allowing for data processing and analysis.

The essence of tokenization is that the tokens cannot be used outside of the specific context they were created for since they do not carry any meaningful information themselves. They serve as placeholders that refer back to the original sensitive data stored securely elsewhere, thus minimizing the risk of exposure and maintaining data privacy while still allowing necessary transactions or analyses to occur.

In summary, the key characteristic of tokenization is its ability to replace sensitive data with a random string, ensuring that the actual data remains protected and secure.