Digital Signing – How Does the Cryptographic Proof Mechanism Work?

Today, digital transactions are becoming increasingly common, but how can we be sure that the information we transmit truly comes from the sender and that its validity has been preserved? The answer lies in digital signatures—a cryptographic mechanism that ensures the authenticity and integrity of digital data. We can consider this a modern digital equivalent of a handwritten signature, but with greater complexity and security.

The concept of digital signing, where a code is added to each message to verify the unaltered state of the data, became a reality in the 1970s thanks to the development of public key cryptography (PKC). Today, this technology is an integral part of many fields—from the international financial system to digital asset platforms operating on blockchains.

Hash functions and their role in creating digital proof

To understand the digital signing process, we first need to know how hash functions work. Hashing is a specialized process that transforms data of any size into a fixed-length output. This is achieved using specific algorithms—hash functions—that generate a hash value, also called a message digest.

Cryptographic hash functions have a remarkable property: even a tiny change in the input data results in a completely different output. This means that the hash value of a message is its unique digital fingerprint. For this reason, hashing is widely used to verify the authenticity of digital data and to check that the data has not been altered in the meantime.

Public key cryptography—two-key system

Digital signing relies heavily on public key cryptography systems. In PKC, a pair of keys is used: one public key and one private key. These two keys are mathematically related, but the public key is known publicly, while the private key must remain strictly secret.

Unlike older symmetric encryption methods, where the same key is used for both encrypting and decrypting data, PKC allows data to be encrypted with the public key and decrypted with the corresponding private key. This difference makes PKC more secure and essential for generating digital signatures.

Digital signing in practice: a three-step process

The digital signing process is divided into three main stages: hashing, signing, and verification.

First step – data hashing: The message or digital data is hashed using a hash function, resulting in a fixed-length message digest. This digest represents the entire content of the message. Although different messages can vary greatly in size, their hash values are always the same length—this is a fundamental property of hash functions.

Second step – signing: After hashing, the sender signs the message. Here, public key cryptography is applied. The sender combines the hash of the message with their private key, producing a unique digital signature. This signature is precisely linked to the message content—any slight change in the message would completely alter the signature.

Third step – verification: The recipient can use the sender’s public key to verify whether the digital signature is authentic. In other words, the public key confirms that the signature was created exactly with the message and by the person holding the corresponding private key.

To illustrate the entire process: suppose Alice sends a message to Bob. Alice hashes the message, combines the hash with her private key to create a digital signature, and sends both the message and the signature to Bob. When Bob receives the message, he uses Alice’s public key to verify that the signature indeed originated from Alice. If someone alters the message, the digital signature will change, and Bob will immediately notice that the data has not been preserved.

Why is cryptographic signing important?

The importance of digital signing stems from three fundamental requirements it fulfills:

Data integrity: The recipient can verify that the message has not been altered in transit. Any modification to the content would result in a completely different signature.

Authenticity: As long as the private key remains secret, the public key can be used to verify that the data was signed by the claimed individual—no one else.

Non-repudiation: When creating a signature, the signer cannot later deny having done so, unless their private key is compromised.

Real-world applications across various fields

The capabilities of digital signing extend far beyond theoretical concepts. In practice, digital signatures are used in many critical areas:

Information technology and cybersecurity: Ensuring the security of internet communication systems and authenticating software via digital signatures.

Financial systems: Digital signatures are indispensable in audits, payment documents, loan agreements, and other financial transactions.

Legal domain: Digital signing of contracts, legal documents, and government agreements has become more widely accepted.

Healthcare: Digital signatures protect the authenticity of prescriptions and medical records, reducing the risk of forgery.

Blockchain and cryptocurrencies: Digital signing is the foundation of the cryptocurrency ecosystem, enabling transactions to be authorized with secure keys.

Challenges and limitations of digital signature schemes

While digital signatures are powerful tools, they face several challenges:

Algorithm quality: Hash functions and cryptosystems used must be reliable and securely developed.

Implementation accuracy: Even the best algorithms are ineffective if their implementation contains flaws.

Private key security: Leakage or theft of the private key means the system no longer meets authenticity or non-repudiation requirements. For cryptocurrency users, losing the private key can lead to significant financial loss.

Digital signing in the blockchain ecosystem

In the context of blockchain, especially Bitcoin, digital signatures play a critical role. Bitcoin uses ECDSA (Elliptic Curve Digital Signature Algorithm) to authenticate transactions. Notably, although Bitcoin employs PKC and digital signatures, it does not involve actual encryption—only signing.

Digital signatures ensure that Bitcoin coins can only be spent by their rightful owners who possess the corresponding private key. This mechanism makes the blockchain system fundamentally secure and trustworthy.

Electronic signatures versus digital signatures

It is important to distinguish between “electronic signatures” and “digital signatures.” Digital signing is a specific type of electronic signature—an authentication method based on cryptographic systems. All digital signatures are electronic signatures, but not all electronic signatures are digital signatures. The main difference lies in the authentication method: digital signatures use cryptographic hash functions, public key systems, and other cryptographic techniques.

Future outlook

Hash functions and public key cryptography are the backbone of current digital signature schemes, used across numerous fields. Proper implementation can significantly enhance security, protect data integrity, and facilitate rapid verification of digital data.

In the blockchain and cryptocurrency sectors, digital signatures are absolutely essential, enabling secure transactions without intermediaries. Bitcoin and other systems demonstrate how we can fully trust cryptographic signing.

Although the concept of digital signatures has been around for decades, its adoption and development continue. While much of today’s bureaucracy still relies on paper archives, the proliferation of digital solutions is steadily increasing. Looking ahead, digital signatures will undoubtedly remain a fundamental tool for making our digital world more secure and efficient.