A software token is a type of two-factor authentication security device that may be used to authorize the use of computer services. Software tokens are stored on a general-purpose electronic device such as a desktop computer, laptop, PDA, or mobile phone. This is in contrast to hardware tokens, where the credentials are stored on a dedicated hardware device.
Because software tokens are something one is not physically in possession of, they are exposed to unique threats such as computer viruses and software attacks. However, both hardware and software tokens are vulnerable to bot-based man-in-the-middle attacks, or simple phishing attacks in which the one-time password provided by the token is solicited, and then supplied to the genuine website in a timely manner. Software tokens do have unarguable benefits: there is no physical token to carry, they do not contain batteries that will run out, and they are cheaper than hardware tokens.
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