What is Digital Signature? Types of Digital Signatures

For a long time, people have used signatures to verify documents. But now everything is going digital, and so are the signatures. According to a report by Fortune Business Insights, the global digital signature market is projected to reach $66.01 billion by 2032. 

All credit goes to the seamless functionality, security, and time-saving qualities they provide. In this blog, we are going to explain everything about digital signatures, their types, and what purpose they serve.

Interested to find out more? Keep Reading!!

What Is a Digital Signature?

A digital signature is an electronic signature that uses cryptographic algorithms to authenticate the sender’s or receiver’s identity. It ensures that the document’s content is not tampered with during transmission and provides a level of security and authenticity that surpasses traditional methods.

Along with providing evidence of origin, it offers transactions, digital messages, and identity and status of electronic documents. It uses PKI(public key infrastructure) to encrypt the data maintained by a certified certificate authority.

A private key and a public key are necessary to encrypt the signature. In case the keys do not match, the signature is invalid.

Recommended: Examples of Digital Signatures & Certificates for Organizations

Digital signatures are essential as they ensure end-to-end message integrity and provide authenticated information about the originator. To be the most effective, it should be a part of the application data so that it is generated at the time of message creation. Then, the signature gets verified at the time of receipt.

Features of Digital Signature

Digital signatures are of great use because of the essential features :

Security:

Because of cryptographic algorithms, digital signatures are highly secure and enforceable. With digital signatures, your documents can never be forged, as the sender’s identity is authentic and verified before attaching it to the document.

Cost Efficiency:

Digital signatures help cut extra costs like mailing, paper printing, traveling, etc., which makes it easy for people to exchange documents from any part of the world without any expense.

Time-saving:

Gone are the days of time-consuming processes of physical document signing, storage, and exchange; with digital signatures, you can quickly sign the documents in minutes.  

Types Of Digital Signature

There are three types of digital signatures depending on everyone’s unique requirements.

Simple Digital Signature

It is one of the most basic and simplest types of signature, as it has no encryption protection. This digital signature does not need extensive verification or any link between the signature and the signer. It is not secure and legally advised as the source of the signer is untraceable because they are easy to fake or duplicate.

This type of signature is proper when it is not essential to validate the signer’s identity.

Basic Digital Signature

The basic digital signature is quite similar to the simple one. They also do not have any legal enforcement or authority. The advantage of basic digital signatures is their ability to show changes after the document’s signature.

However, the signature cannot refer to confirmed identification; thus, it cannot guarantee the protection of the identity. Even after being digitally signed, the content of the document can change.

A basic digital signature has no security bound by any verification process or cryptographic algorithm that could add a sense of security to this digital signature.

Advanced & Qualified Digital Signature

An advanced and qualified digital signature is the safest, and has legal enforceability similar to handwritten signatures on paper. These signatures get created with public key infrastructure and asymmetric cryptographic technology.

The cryptographic algorithm creates two asymmetric keys – the private key and the public key to encrypt and decrypt the document. This makes sure that data is safe between the sender and the recipient without any fear of tampering. It indicates where, when, and what devices to use in the document signing procedure.

With excellent security, it easily tracks the modifications made to the document after the signature. The process of confirming a user’s identity by this digital signature service provider makes it unique. It provides two-step verification, which involves SMS transmission of OTPs and mobile phone biometric scanning.

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How Digital Signatures Work?

Everybody’s handwritten signatures are unique in one way or another. Just like these, digital signatures are unique to each signer.

Here’s how digital signatures work!

These use public key infrastructure (PKI), the gold standard for digital identity authentication and encryption, to generate two keys:

• Private key
• Public key

The private key is kept secret and used for signing documents, while the public key is shared with others and used for verifying signatures.

Creating the Signature:

• When a signer electronically signs a document, their private key creates the signature.

• Then, the algorithm generates a unique hash (a fixed-length string of characters) of the document using a hashing algorithm.

• This hash is then encrypted with the private key to create the digital signature.

• The digital signature and the original document are sent to the recipient.

Verification Process:

• The recipient gets the signed document, the digital signature, and the signer’s public key.

• The recipient uses the public key to decrypt the digital signature, and the algorithm then regenerates the hash from the received document.

• If the regenerated hash matches the decrypted hash from the digital signature, the signature is valid, and the document is unchanged.

• But if the public key cannot decrypt the signature or the hashes do not match, it indicates the signature is invalid, or the document has been altered.

Add a Digital Signature to your Software or Code and Prevent Software Tampering and Attacks with a Code Signing Certificates!

Digital Signature Use Cases

Nowadays, digital signatures are proving helpful in many industries. Some of them are:

Government

Globally, governments use digital signatures to process tax returns, verify business-to-government transactions, enforce sanctions, and manage contracts. Other than that, government entities adhere to strict laws, standards, and regulations by using digital signatures. They also use smart cards to identify citizens.

These cards come with a chip with a digital signature, providing the cardholder access to the institution’s systems or physical buildings.

Manufacturing

With digital signatures, manufacturing companies speed up the process, including quality assurance, manufacturing enhancements, product design, marketing, and sales. The use of digital signatures comes under the ISO and the National Institute of Standards and Technology.

Healthcare

Digital signatures in the healthcare industry help improve the efficiency of administration and treatment processes, e-prescribing, and hospital admissions, and strengthen data security.

Cryptocurrencies

To authenticate blockchain usage, cryptocurrencies and bitcoin use digital signatures. It helps manage transaction data in association with cryptocurrency and assists users in showing their participation in transactions and ownership of currency.

Financial Services

The US financial sector utilizes digital signatures for loan processing, insurance documentation, paperless banking, and mortgages.

Importance of Digital Signatures

With the significant rise in the use of digital products, fraudulent activities are also rising. And when it comes to data privacy and security, people do not want to compromise. Message authentication, data integrity, and message non-repudiation are some digital signature features.

Of the three types of digital signatures, advanced and qualified digital signatures are best if you sign any digital document. In today’s time, various large enterprises and small startups have started using digital signatures, and it has helped them enable vast volumes of documentation and run operations smoothly without any fear of tampering.

A digital signature is also time-saving and cost-efficient, allowing businesses to focus more on the flow and quality.

Benefits Of Digital Signature

Digital signatures have multiple advantages, such as:

Security:

Digital signatures are highly secure and ensure that content and code are tamper-free and signatures are legitimate. The security features comprise personal identification numbers (PINs), asymmetric cryptography, CA and trust service provider (TSP) validation, and cyclic redundancy checks (CRCs).

Time-saving:

Simplifying the time-consuming process of handwritten signatures, storage, and exchange lets businesses quickly sign and access the documents.

Cost Saving

With digital signatures, enterprises are becoming paperless and saving a considerable amount of money previously spent on physical resources, personnel, and office space.

Timestamping

It provides the time and date of the digital signature and is essential when timing is crucial, such as for lottery ticket issuance, stock trades, and legal proceedings.

Legally Compliant

As digital signatures become a global standard, more countries accept them legally.

Traceability

It creates an audit trail that makes record-keeping hassle-free. With messages and documents stored digitally, there is significantly less chance for a record keeper to make mistakes.

The Bottom Line

A digital signature ensures the document and its software security. It creates a virtual fingerprint that is unique to an entity or individual to identify users and protect sensitive information in the messages.

Other than that, a digital signature is far safer and secure than other forms of electronic signature. If you are a business owner, use digital signatures to increase safety and save considerable time and money.

Frequently Asked Questions (FAQs)

What are the Different Types of Digital Signatures?

Digital signatures are of three types-

• Simple Digital Signature
• Basic Digital Signature
• Advanced & Qualified Digital Signature

Why is Digital Signature getting more popular?

With the rise of digital products and technologies, fraudulent activities are increasing. Every now and then, many websites and their sensitive data are being tampered with.

So, to protect documents and code from security breaches, a digital signature is essential. Also, it is legally compliant and saves organizations time and money.

What are the Benefits of Digital Signatures?

Digital signature offers a great level of security and saves time and money. Along with that, it is legally compliant.

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