Introduction

A digital signature is a mathematical method used to verify and validate the authenticity and integrity of a message, digital document, or software. It’s the digital equivalent of a stamped seal or a handwritten signature, but it offers far more security.

The main idea behind a digital signature is to solve the problem of impersonation and tampering in digital communications.

Digital signatures can provide evidence of identity, status, and origin of electronic documents, digital messages, or transactions. They can also be used by the signer to acknowledge informed consent. 

In the United States and many other countries, digital signatures are considered legally binding, just like traditional handwritten document signatures.

How do digital signatures work?

Digital signatures are built on public key cryptography, called asymmetric cryptography. When using a public key algorithm like RSA (Rivest-Shamir-Adleman), two keys are generated, creating a mathematically connected pair of keys, one public and one private.

The person who creates the digital signature uses a private key in order to encrypt data that is signature-related, while the only way to decrypt that data is with the signer’s public key. 

If the recipient can’t access the document with the signer’s public key, that can be a sign that there is a problem with the signature or the document itself. This is how signatures are authenticated.

The technology behind digital signature requires all parties to trust that the person creating the signature has kept the private key, in fact private. If someone else has access to the private key, that party can create counterfeit signatures on behalf of the private key holder.

Benefits of digital signatures?

The main benefit of digital signatures is security. Security abilities embedded in digital signatures make sure a document is not tampered with and signatures are valid. Security methods and features used in digital signatures include the following: 

• Asymmetric cryptography – employs a public key algorithm that contains public and private key authentication and encryption.
• A checksum – is a long string of letters and numbers that represents the sum of the digits in a piece of data, against which comparisons can be made to find changes and errors.
• Certificate authority validation – CAs (Certificate Authorities) are trusted third parties that administer, authenticate, issue, and maintain digital certificates. The use of CAs helps to minimize the creation of fraudulent digital certificates.
• Cyclic redundancy check – An error-detecting code and verification function used in digital networks and storage devices to identify modifications to unprocessed data.
• Passwords, PINs, and codes – Used to authenticate and verify a signer’s identity and approve their signature. Email, username, password, and other methods are the most common.
• Trust service provider validation – Is a legal entity or a person that performs validations of digital signatures on behalf of the company and offers validation reports.

There are many other benefits to using digital signatures. For example – time stamping, it’s legally compliant and globally accepted, has time and cost savings has a positive impact on the environment, and has traceability.

How to create a digital signature?

In order to create a digital signature, you have to use a signing software, like an email program to provide a one-way hash to be signed of the electronic data.

A hash is a string that is fixed-length that consists of numbers and letters generated by an algorithm. Then the creator’s private key is used to encrypt the hash, and the hash along with other information, like hashing algorithm is the digital signature.

A hash function can convert an arbitrary input into a fixed-length value, which saves much more time, and this is the reason for encrypting the hash instead of the entire document or message. Hashing is much faster than signing.

To the hash data, the value of a hash is absolutely unique. If there are any changes in the data or in a single character, data will result in a different value. This feature allows others to use the signer’s public key to decrypt the hash to validate the trustworthiness of the data.

If the decrypted hash matches a second computed hash of that same data, it means that the data hasn’t changed since it was signed. If the two hashes don’t match, the signature was created with a private key that doesn’t correspond to the public key, which is an issue with authentication or the data was compromised in some way.

A digital signature can be used with any kind of message, encrypted or not just so the receiver can be certain of the identity of the sender and the message arrived complete.

Digital signatures make it hard for the signer to deny that he in fact signed something because the digital signature is unique to the signer and document and it links them together. This is called nonrepudiation.

Digital signatures are very different than digital certificates. A digital certificate is an electronic document that contains the digital signature of the issuing certification authority’s validation. It connects a public key with an identity and can be used to verify that the public key belongs to an entity or person.

Most modern email programs support the use of digital signatures and certificates, making it easy to sign any emails and validate digitally signed messages that are incoming. Digital signatures are also used to provide proof of data integrity, authenticity, and nonrepudiation of transactions and communications conducted over the internet.

Types and classes of digital signatures

Digital signature contains three different classes:

• Class 1 – can’t be used for any legal documents as they are verified based only on an email ID and username. This class provides a basic level of security and is used in environments with a low risk of data compromise.
• Class 2 – is usually used for the electronic filing of tax documents. This class authenticates a signer’s identity against a pre-validated database. It’s used in environments with a moderate level of risk.
• Class 3 – is the top level of digital signatures. It requires an organization or a person to present in front of a CA to prove their identity before signing anything. Class 3 signatures are used for e-ticketing, e-auctions, court filing, and in other environments where risks are extremely high.

Uses for digital signatures

Digital signature technology is used to improve document integrity and streamline processes. There are many industries that use digital signatures.

• Healthcare – they are used in this industry to improve the efficiency of administrative processes and treatments, to improve data security, for hospital admissions, etc. 
• Government – the U.S. government publishes e-versions of budgets, laws, and bills, with digital signatures. They are used for many reasons, verifying business transactions, processing tax returns, managing contracts, and others.
• Manufacturing – these companies use signatures to make the processes faster, such as quality assurance, product design, marketing, manufacturing enhancements, and sales. 
• Cryptocurrencies – digital signatures are used in many cryptocurrencies to verify the blockchain. Also, they are used to manage transaction data related to cryptocurrency and as a way to show participation in transactions or ownership of the currency. 

Main differences between a digital signature and an electronic signature

Even though these two terms sound almost the same, there is a big difference between them. An electronic signature is a legal term that is defined legally, and a digital signature is more of a technical term, or rather the result of a cryptographic process that can be used to authenticate a string of data. 

In some way, a digital signature can be expressed digitally in electronic form and can be a type of e-signature. To put it simply, an e-signature can be simple as the signer’s name on a form on a webpage. 

Key differences between these two terms are that digital signature uses an algorithm to validate data and to verify the origin of a signature, while electronic signature uses electronic sounds, processes, or symbols attached with a record or contract to verify the origin. 

Electronic signatures can be any electronically applied signature, while digital signature must be issued by a CA. As we mentioned above, a digital signature is a type of e-signature, and e-signature is a wider term that surrounds the definition of digital signature.

A digital signature provides cryptographic proof of the authenticity and integrity of a document and the signer’s signature, and on the other hand, an e-signature confirms intent to sign a document but doesn’t always give proof of identity or integrity. 

Although digital signatures that are authenticated provide cryptographic proof that a document was signed by the specified entity and has not been tampered with, not all e-signatures give equivalent assurances.

The role of digital signatures in blockchain

The use of digital signatures is a crucial component of blockchains, particularly used to authenticate transactions. 

Users must demonstrate their authority to spend money when they submit transactions, while at the same time preventing other users from doing so. Every peer in the network will verify the submitted transaction and check all other nodes’ work to reach an accurate status.

The miners will check the transaction’s conditions and authenticate the signature once they know her public key. When verification of validity is completed, a block with that transaction is ready for finalization by a validator/miner.