How Digital Signatures Work

What are digital signatures?

Digital signatures are like electronic “fingerprints.” They are a specific type of electronic signature (e-signature). In the form of a coded message, the digital signature securely associates a signer with a document in a recorded transaction. Digital signatures use a standard, accepted format, called Public Key Infrastructure (PKI), to provide the highest levels of security and universal acceptance. PKI involves using a digital certificate for identity verification.

Understanding Digital Signatures

Also, digital signatures are cryptographic signatures that provide a high level of security and authenticity to electronic documents. These signatures use a mathematical algorithm to verify the integrity of a document and the identity of the signer.

What’s the difference between a digital signature and an electronic signature?

A digital signature is a type of electronic signature that requires a more rigorous level of identity assurance through digital certificates. The broad category of electronic signatures (e-signatures) encompasses many types of electronic signatures. The category includes digital signatures, which are a specific technology implementation of electronic signatures. Both digital signatures and other e-signature solutions allow you to sign documents and authenticate the signer. However, there are differences in purpose, technical implementation, geographical use, and legal and cultural acceptance of digital signatures versus other types of e-signatures.

In particular, the use of digital signature technology for e-signatures varies significantly between countries that follow open, technology-neutral e-signature laws, including the United States, United Kingdom, Canada, and Australia, and those that follow tiered eSignature models that prefer locally defined standards that are based on digital signature technology, including many countries in the European Union, South America, and Asia.

In addition, some industries also support specific standards that are based on digital signature technology.

How do digital signatures work?

Digital signatures, like handwritten signatures, are unique to each signer. Digital signature solution providers, such as DocuSign, follow a specific protocol called Public Key Infrastructure, or PKI. PKI requires the provider to use a mathematical algorithm to generate two long numbers, called keys. One key is public, and one key is private.

When a signer electronically signs a document, the signature is created using the signer’s private key, which is always securely kept by the signer. The mathematical algorithm acts like a cipher, creating data matching the signed document, called a hash, and encrypting that data. The resulting encrypted data is the digital signature. The signature is also marked with the time that the document was signed. If the document changes after signing, the digital signature is invalidated.

As an example, Jane signs an agreement to sell a share using her private key. The buyer receives the document. The buyer who receives the document also receives a copy of Jane’s public key. If the public key can’t decrypt the signature (via the cipher from which the keys were created), it means the signature isn’t Jane’s, or has been changed since it was signed. The signature is then considered invalid.

To protect the integrity of the signature, PKI requires that the keys be created, conducted, and saved securely, and often requires the services of a reliable Certificate Authority (CA). Digital signature providers, like DocuSign, meet PKI requirements for safe digital signing.

How do I create a digital signature?

E-Signature providers, such as Flowmono, that offer solutions based on digital signature technology, make it easy to digitally sign documents. We provide an interface for sending and signing documents online and work with the appropriate Certificate Authorities to provide trusted digital certificates.

Depending upon the Certificate Authority you are using, you may be required to supply specific information. There also may be restrictions and limitations on whom you send documents to for signing and the order in which you send them. Flowmono’s interface walks you through the process and ensures that you meet all of these requirements.

Are eSignatures, based on digital signature technology, legally enforceable?

Yes. The EU passed the EU Directive for Electronic Signatures in 1999, and the United States passed the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000. Both acts made electronically signed contracts and documents legally binding, like paper-based contracts. Since then, the legality of electronic signatures has been upheld many times.

In Nigeria, the Nigerian Evidence Act recognizes the use of electronic signatures. Leading digital transaction management solutions can provide electronic records that are admissible in evidence under Section 93 of the Nigerian Evidence Act, to support the existence, authenticity, and valid acceptance of a contract.

Why would I use a digital signature?

Digital signature offers several advantages, including enhanced security, convenience, and efficiency. It ensures the authenticity and integrity of digital documents, eliminates the need for physical signatures, and streamlines the signing process, making it a practical and modern solution for authentication in the digital age.

Many industries and geographical regions have established eSignature standards that are based on digital signature technology, as well as specific certified CAs, for business documents. Following these local standards based on PKI technology and working with a trusted certificate authority can ensure the enforceability and acceptance of an e-signature solution in each local market. By using the PKI methodology, digital signatures utilize an international, well-understood, standards-based technology that also helps to prevent forgery or changes to the document after signing.

How Flowmono can help?

Flowmono provides you with a simple, yet powerful user interface to digitally sign business documents. You can also automate the digital workflows as per your company’s requirements and stay compliant with local and international e-signature standards.

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