What is Digital Signature? – Explained
What is a digital signature?
Digital signatures are an electronic alternative to manually done by pen and paper. It securely binds the signatory with the document in the form of a coded message. It also ensures that signed data is cryptographically secured and the content data is not altered in transit.
A digital signature is similar to e-signature backing by an electronic certificate. Usually, trusted authorities like Certificate Authority (CA) issue them and contain the public key. It also specifies the identity, e.g. an organization that generates the key.
Digital signatures make the data temper proof and overcome the problem of impersonation. Additionally, when issued by third-party providers, digital signatures often comply with regulations around the world.
Furthermore, digital signatures help secure financial and business transactions, emails, and software distributions. An industrial standard format naming Public Key infrastructure ensures the security, integrity, and authenticity of data.
Public key infrastructure:
Public key infrastructure is a set of software, hardware, and procedural requirements for managing digital signatures. Each transaction contains two keys: a private key and a public key. The signer owns the private key and use it to sign the e-signatures. Sharing a private key is not an option. At the same time, the public key is exempt from such rule, you can share it with other recipients who need to verify the signer’s signatures. Public key infrastructure is a mathematical algorithm that generates public and private keys.
It also checks the authenticity of users and devices in the digital world, especially in cryptocurrency ecosystem. Moreover, PKI requires that the keys are created and saved securely to protect the integrity of the signature and is usually done by a reliable Certificate Authority (CA).
Additionally, PKI implements the enrollment software, certificate authority, and certificate managing tools.
How do digital signatures work?
Digital signatures are unique to each signer as providing authorities need to follow Public Key infrastructure.
When a signer electronically signs a document, he creates a signature using his private key. A mathematical algorithm creates a cryptographic hash for the document. After that, signer’s private key encrypts it. This encrypted data, along with cryptographic hash, is a digital signature and is also marked with the time of signing. Finally, it reaches to recipients along with a public key certificate.
Using the public key, the recipients decrypt the encrypted hash. Recipient also receive another cryptographic hash at his end. After this, a comparison of both cryptographic hashes matches the document and checks the authenticity to find any changings.
Types of digital Signatures:
Advanced electronic signature (AES) and Qualified Electronic structure (QES) are two types.
Both advanced and qualified digital signature service providers fulfilling a 2-factor authentication before signing the document. In addition to an electronic certificate, they require extensive verification and authentication process. For example, AES adds identity verification, and Signatures must be capable of identifying the signer. QES requires a Face to face identity verification. They are mostly used in high-value, big business deals and cross-border agreements.