A digital signature is an innovation through which the validity of a digital transaction is determined. A digital signature can ensure the receiver that the message has really been sent by the sender, and the sender can no longer deny the message he/she has sent. We will go through first, and briefly explain the blockchain then the concept of digital signature and its functions in the blockchains in this article, so stay with us.
What is Blockchain?
Blockchain is a decentralized, digital ledger technology that is used to store and transmit data securely and transparently. It allows for the creation of a distributed database that is maintained by a network of computers, rather than a single central authority. In a blockchain system, data is organized into blocks that are linked together in a chronological and immutable chain. Each block contains a cryptographic hash of the previous block, along with a timestamp and a record of any transactions that occurred within that block. Once a block is added to the chain, it cannot be altered or deleted without also altering all subsequent blocks in the chain. This makes blockchain highly secure and resistant to tampering or hacking.
What is a digital signature?
Digital signatures have a long history. These signatures were first made by scanning physical signatures. Later on, they evolved and made use of light pens and touch screens. The digital signature we know and use today is the most advanced one. It consists of a username and a password that proves your identity in the digital world.
Digital signatures are based upon a technology called “asymmetric encryption” or “public key cryptography”. Public and private keys have crucial roles in how digital signatures work. They are long strings of code containing random numbers and letters. Public and private keys are used for encoding and decoding data. Each public key complies with a specific private key, but they are not the same. For this reason, they are called asymmetric.
Another big difference between a public key and a private key is that the public key is shared with others, while the private key is kept secret. However, this is not a complex concept. All of us are using public and private keys every day. For example, when we send an email to a friend, our email address can be considered our public key and our password can be considered our private key.
The combination of each public and private key is called a “key pair”. Key pairs are used for encoding messages and broadcasting them, and also for decoding and reading them.
Digital signatures in blockchain networks
Let’s go through the functionality of digital signatures in a blockchain network through an example. When your friend wants to send you some amount of cryptocurrency, he/she asks for your address. You give your address to your friend and wait for the cryptocurrency to appear in your wallet. This address is your public key. You also have a private key that you usually don’t share with anyone. This private key is the tool you use to access your cryptocurrencies.
Cryptocurrency wallets usually show your private keys in the form of 12 to 24 words represented in a specific order. These words are called “seed phrases”. They are not exactly your private keys, but since a private key is a long code that may be difficult to memorize or keep safe, cryptocurrency wallets transform them into seed phrases and represent them this way. So, seed phrases act like private keys in the world of blockchains and cryptocurrencies.
Conclusion
You don’t need to know how a digital signature is created or how public and private keys work. However, being familiar with the theories behind these complex processes is not useless. The most important use it has is you figure out how secure blockchains are and where they get this security from. The more knowledge you have of blockchains and cryptocurrencies, the better investment decisions you can make.
