A digital signature is a cryptographic mechanism used to verify the authenticity and integrity of digital data. We may consider it as a digital version of the ordinary handwritten signatures, but with higher levels of complexity and security. To learn how digital signatures work, we need to understand the basics of hash functions and public-key cryptography.
Hash functions
The process of hashing involves transforming data of any size into a fixed-size output
- This is done by a special kind of algorithms known as hash functions.
- When combined with cryptography, the so-called cryptographic hash functions can be used to generate a hash value (digest) that acts as a unique digital fingerprint
Use cases
Digital signatures can be applied to various kinds of digital documents and certificates
- Information Technology
- To enhance the security of Internet communication systems
- Finance
- Digital signature can be implemented to audits, expense reports, loan agreements, etc.
- Legal
- Digital signing of all sorts of business contracts and legal agreements
- Healthcare
- Can prevent fraud of prescriptions and medical records
- Blockchain
- To ensure that only the rightful owners of the cryptocurrencies are able to sign a transaction to move the funds
Electronic signatures vs. digital signatures
Digital signatures refer to one particular kind of electronic signatures – which refer to any electronic method of signing documents and messages.
Closing thoughts
Hash functions and public-key cryptography are at the core of digital signature systems
- If properly implemented, digital signatures can increase security, ensure integrity, and facilitate the authentication of all kinds of digital data
- A great portion of today’s bureaucracy is still based on paperwork, but there is still a lot of room for growth
Verifying
If Alice writes a message to Bob, hashes it, and then combines the hash value with her private key to generate a digital signature, the signature will work as a unique digital fingerprint of that particular message.
- When Bob receives the message, he can check the validity of the digital signature by using the public key provided by Alice.
Public-key cryptography (PKC)
PKC refers to a cryptographic system that makes use of a pair of keys: one public key and one private key.
- The two keys are mathematically related and can be used for both data encryption and digital signatures, making it more secure than more rudimentary methods of symmetric encryption.
Why are digital signatures important?
Digital signatures are often used to achieve three results: data integrity, authentication, and non-repudiation
- Data integrity: Bob can verify that Alice’s message wasn’t changed along the way
- Authenticity: As long as Alice’s private key is kept secret, Bob can use her public key to confirm that the digital signatures were created by Alice and no one else
- Not repudiation: Once the signature has been generated, Alice won’t be able to deny having signed it in the future, unless her private key gets somehow compromised
Limitations
The major challenges faced by digital signature schemes rely on at least three requirements: Algorithm, Private Key and Implementation
- Algorithm: The quality of the algorithms used in a digital signature scheme is important.
- Private Key: If the private keys get leaked or somehow compromised, the properties of authenticity and non-repudiation will be invalidated.
Hashing the data
This is done by submitting the data through a hashing algorithm so that a hash value is generated (i.e., the message digest).
- When they are hashed, all their hash values have the same length.
- For cryptocurrencies, the data is always hashed because dealing with fixed-length digests facilitates the whole process.
Signing
After the information is hashed, the sender of the message needs to sign it
- This is where public-key cryptography comes into play
- There are several types of digital signature algorithms, each with its own particular mechanism
- But essentially, the hashed message will be signed with a private key, and the receiver can then check its validity by using the corresponding public key
