I want to understand what token-based authentication means. I searched the internet but couldn\'t find anything understandable.
From Auth0.com
Token-Based Authentication, relies on a signed token that is sent to the server on each request.
What are the benefits of using a token-based approach?
Cross-domain / CORS: cookies + CORS don't play well across different domains. A token-based approach allows you to make AJAX calls to any server, on any domain because you use an HTTP header to transmit the user information.
Stateless (a.k.a. Server side scalability): there is no need to keep a session store, the token is a self-contained entity that conveys all the user information. The rest of the state lives in cookies or local storage on the client side.
CDN: you can serve all the assets of your app from a CDN (e.g. javascript, HTML, images, etc.), and your server side is just the API.
Decoupling: you are not tied to any particular authentication scheme. The token might be generated anywhere, hence your API can be called from anywhere with a single way of authenticating those calls.
Mobile ready: when you start working on a native platform (iOS, Android, Windows 8, etc.) cookies are not ideal when consuming a token-based approach simplifies this a lot.
CSRF: since you are not relying on cookies, you don't need to protect against cross site requests (e.g. it would not be possible to sib your site, generate a POST request and re-use the existing authentication cookie because there will be none).
Performance: we are not presenting any hard perf benchmarks here, but a network roundtrip (e.g. finding a session on database) is likely to take more time than calculating an HMACSHA256 to validate a token and parsing its contents.
When you register for a new website, often you are sent an email to activate your account. That email typically contains a link to click on. Part of that link, contains a token, the server knows about this token and can associate it with your account. The token would usually have an expiry date associated with it, so you may only have an hour to click on the link and activate your account. None of this would be possible with cookies or session variables, since its unknown what device or browser the customer is using to check emails.