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A survey by Markets and Markets indicates that economic development in emerging regions and an increase in mobile-and web-based business-critical applications will drive the digital signature market. However, the survey adds that despite offering higher data authenticity and integrity, traditional practices, legality issues, and a general lack of awareness will limit the sector from fully realizing its potential. 

What is a digital signature?

Digital signatures are an alternative to handwritten or traditional signatures. They use advanced mathematical algorithms to verify the authenticity of digital documents to guarantee that the communication is genuine. However, a digital signature is not merely a tool for verifying documents. It also provides crucial information, such as the message's origin and status, among other details. 

These characteristics make digital signatures extremely useful when sensitive documents are shared within an enterprise or externally. It helps enterprises to have transparent online interactions and strengthen trust between partners or vendors.

Digital signature vs. electronic signature

While people often confuse digital signatures with electronic or eSignatures, both differ in implementation (technical), geographical usage, and legal acceptance. eSignatures represent a person's consent to approve a document. The approval could be oral or with a simple click of the mouse. On the other hand, a digital signature is backed by a digital certificate. It is used to protect documents as it offers higher levels of authenticity and integrity. 

Digital signatures: the key terms

Before we get into digital signatures, let's understand some terms.

• Hash function: The hash function is a fixed string of numbers generated through a mathematical algorithm. In cryptography, it entails compressing a numerical input into another numerical value. The string is unique to each shared or hashed file. It is a one-way function, meaning users cannot use it to find other files which may have the same hash value.

• Public key cryptography: Also known as asymmetric encryption, it uses a key pair system. The public key encrypts the data, and the private key decrypts it. Public key cryptography is used to ensure a document's confidentiality, authenticity, and integrity.

• Public Key Infrastructure (PKI): PKI includes the entire infrastructure – policies, standards, people, and systems – to support public key distribution. It allows identity validation through digital certificates signed by a certification authority (CA).

• CA: The CA is a third party that generates a public or private key for an individual to validate their identity. Once CA validates someone's identity, a duly signed digital certificate gets issued to the person. The certificate can be used to verify a person’s identity.

• PGP or OpenPGP: PGP/OpenPGP is a key-based encryption method to ensure that only the intended recipient decrypts the communication. Though primarily used to secure emails, it’s effective in securing FTP, too. All communications are encrypted using random keys, and the recipient decrypts them using public keys.

How do digital signatures work?

Digital signature technology generates a unique hash for a digital document or message. This hash is encrypted using a private key. Changing any part of the hash will result in changing the entire string. This feature helps ensure that the document is not tampered with during transit.

Once an encrypted hash is generated, the document is digitally signed and forwarded to the receiver. The recipient will use a public key provided by the sender to create a hash to decrypt the sender's hash. If the hashes match, the document is genuine, and the sender gets authenticated.

Image Source:Docusign.com

Are digital signatures secure?

The objective of digital signature is to maintain transparency and integrity of sensitive documents. Most digital signature providers follow PKI or PGP protocols to generate private or public keys, strengthening digital signatures' security. In this case, yes, digital signatures can be considered secure.

The security of digital signatures often depends on the robustness of the PKI or PGP protocol in use. Without these protocols, validating someone's identity or revoking a compromised key is impossible. If these are weak or not in place, malicious actors can impersonate someone. Ensuring the digital signature provider one opts for has a robust PGP or PKI protocol is critical to ensuring security. These trusted third-party digital signatures can be instrumental in identifying and verifying individuals while maintaining the integrity of the message.

Final thoughts

With the rising trend of remote work and the reliance on digital platforms, online transactions and interactions have become more common. As we move towards a paperless world, cybersecurity threats are also increasing. Digital signatures can play a critical role in safeguarding the integrity of sensitive data shared by organizations.