# What is a Digital Signature? A Beginner’s Guide in 5 Easy Points

## Introduction

There are times when old fashioned solutions don’t meet our demands of the modern world such as signing contracts, agreements, and documents with pen & paper. In today’s digital world in which online paperless transactions are used more widely, we need a more flexible and responsive solution like digital signatures.

A digital signature is equivalent to a handwritten signature and helps secure the integrity of the digital information exchanged between two parties. In the European Union, parts of North America, and APAC, digital signatures are just as valid as the one done with ink. By understanding what is a digital signature and using the same, we can better protect our digital documents, messages, and online transactions.

## 1. What is a Digital Signature?

Let’s understand what is a digital signature.

A digital signature is a type of electronic signature. It is a mathematical technique used to authenticate the data exchanged over the internet like emails, digital documents, card transactions, etc. It sorts of creates a unique virtual fingerprint that represents the identity of the sender and protects the information in the digital document.

It is commonly used for financial transactions, software distributions, and other areas where it is imperative to ensure that there is no breach of data or any forgery. It is very popular with email users where email content becomes the part of the digital signature. It increases the transparency of online transactions and develops trust between the parties involved.

## 2. Encryption

Encryption is a process of scrambling the contents of a digital message so that only a specific person can read it. There are 2 types of encryption:

• Symmetric Encryption – It involves protecting a digital file with a single key used by both sender and receiver. The sender encrypts a message with a key and shares the same key with the receiver to decrypts the message. To securely exchange the key with the receiver can become a challenge at times, there are chances of communication getting compromised.
• Asymmetric Encryption – It is also called public-key encryption involves a pair of 2 different keys to encrypt and decrypt the data. These 2 keys are mathematically linked. The key which is known to everyone is a public key, the one which is only known to the creator of the keys is called a private key. This process starts with the receiver creating 2 keys and sharing the public key with the sender.
• The message is then encrypted by the sender using the public key and is exchanged digitally with the receiver. The encrypted message is decoded by the receiver using his private key. This method certifies the integrity of the data, however, does not bind the sender with the message as the public key is a common key known to a lot of people. To establish the ownership of the message, the digital signature process is used.

## 3. Working of Digital Signature

A digital signature uses asymmetric encryption, also called public-key cryptography, a method that uses a key pair system. There is a set of the key where one is called the private key accessible only to the sender to encrypt the signature and the public key to decrypt the signature, available to all the people who receive data. The digital signature process involves the following steps.

• The sender of the data, also called the signer generates two keys – a public key which he shares with the receiver, and a private key which he keeps with himself. One of the popular and secure digital signature algorithm to generate these keys is the RSA Algorithm.
• Digital signature cryptography: The signer generates a unique value called a hash using a mathematical/hashing algorithm from the digital data file. Hash is an alpha-numeric string of fixed length. It is then encrypted using the key only known to the signer i.e. the private key. This encrypted hash is the digital signature that is appended to the document and is electronically sent to the receiver with the public key.
• In this case, only the signature is encrypted, not the data in the digital document. It is more efficient and economical to encrypt a small digest rather than the whole message/data.
• Digital signature verification: The receiver of the digital file decrypts the digital signature using the public key that proves the authenticity of the data file. He then generates his hash using the same hashing algorithm. If the two hash match, it certifies the integrity of the data which means that the data has not tampered in transit.

## 4. Types of Digital Signature

There are 3 types of digital signatures used:

1. Class 1: It is the simplest form of digital signature which provides a basic level of assurance or security for digitally transferred data. It is generally used to identify the username if email ids however not recommended for statutory or business documents.
2. Class 2: It is used for transactions with a substantial risk of fraud. The majority of it is used for e-filing work like Income Tax Return filing, ROC filing, P.F, registration of companies, etc.
3. Class 3: It provides the highest level of security to the digital data. It is used by both individuals or organizations. It is used for transactions highly susceptible to fraud resulting in serious consequences. They are normally used for e-tenders, e-procurements, etc.

## 5. Purpose of Digital Signature

There are 3 main advantages/purposes of digital signature.

• Authentication: A digital signature is an electronic verification of the sender of the digital message. It is proof for the receiver that the message is created and sent by a known or a claimed sender. The ownership of the secret key to create a digital signature lies with the sender, so a valid signature shows that the message was sent by that user.
• Non-repudiation: With a digital signature, the sender cannot disclaim the responsibility of sending the message. If any such dispute arises in the future, the receiver can use the digital signature as evidence to prove the origin of the message.
• Integrity: A digital signature ensure the digital data exchanged has not been altered or hacked during transmission. The digital signature is marked with the time it was created. If the document is altered after that time, the digital signature is invalidated telling the receiver that the digital document has been tampered with.

## Conclusion

Digital signature benefits like a high level of security, paperless online transactions, reduction of cost and effort, increased productivity and efficiency, remote access, and better user convenience make it a highly trusted and secure way for e-transactions or sharing information over the internet. Studies show that a digital signature scheme helps in saving one week per year for a working adult.

It can be used by common citizens, enterprises, and government for business or other legal purposes. It is used in many forms like a digital signature as an appendix to the document, a digital certificate, encrypting the whole document, or simply signing an email. It is unique and cannot be copied which is its biggest asset that binds the digital document with the owner of the sender of the data.

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