Digital signatures can help you to reduce paper waste, speed document delivery, and decrease overall business operating costs. In a nutshell, digital signatures are implemented using private and public keys.
The private keys are used to sign the document, while the public keys are used to open the digitally signed document. But how do digital signatures work?
Read to discover how digital signatures are implemented, and what makes them secure.
How Documents are Signed Digitally
1. Creating a Unique Hash
The first step in the creation of a digital signature is to create a unique digital fingerprint or Hash. This happens when you click the “Sign” button. The hash is generated based on the document’s contents, and it can have a 128-bit or 256-bit format.
The digital signature software uses a mathematical algorithm to create the Hash output. Any slight change to that document will result in an altered Hash when the digital signature software tries to regenerate the Hash.
2. Encrypt the Hash
The second step is to encrypt the hash by using the signer’s private key. A signer’s private key is the input the signer puts on the digital document, as their visible signature.
This can be a name, series or symbols, or their usual signature in digital form. The mathematical combination of the hash with the signer’s key is what gives us the digital signature.
Once this step is complete, the digital signing is complete. The digitally signed document can be sent to the receiver.
3. Receiving a Digitally Encrypted Document
Just as the sender had to apply a digital key to send their document, the receiver must also apply a key to decrypt that document. However, the receiver doesn’t use a private key. Instead, they use a public key.
The receiver gets the public key from the software used to sign the document digitally. The receiver must use their public key to open the signed document. They will know it as the document’s passcode or password. If they don’t have it, they can’t open it.
4. Verifying a Digital Signature
The software used to open the document such as a PDF reader uses the public key to open the document in the background, and then converts it to another hash value. It then compares this value to the one generated and recorded when the document was first signed.
If there is a match, the software will display the contents of the document. The software will not display its contents if the hash values don’t match.
If they match, it displays the document’s contents and a message that says, “This document hasn’t been altered since the signature was applied.”
Conclusion – Signing Documents Digitally
In the past few years, the need to sign business documents online has been on the rise. And fraudsters have taken note of that and defrauded businesses at every opportunity. In turn, businesses have resolved to use digitally signed documents only. Now, digital signatures are used even in Bitcoin work.
It’s currently projected that the digital signature industry is growing at a CAGR of 24.2%, and will do so up to 2025.
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