Digital signature is a binary code, which authenticates and executes a document and identifies the signatory. This type of signature can be sent only as a part of an electronic document or message. Digital signatures are based on cryptographic public key algorithms, such as RSA, which generates two keys, one private and one public, that are mathematically linked. This type of signature can be used with any kind of message, whether it is encrypted or not, so the receiver can be sure of the sender’s identity and that the message arrived intact without being intercepted by adversaries or eavesdroppers.
Digital signatures are one of the four cornerstones of Bitcoin and the blockchain technology. To conduct a Bitcoin transaction, the sender of Bitcoin mut generates a private key and public key pair. Then the message, or Bitcoin transaction, must be signed with the sender’s digital signature. Next, the sender will broadcast their public key, the signature, and the message, or transaction request, to the network. Each time a new transaction is sent, an entirely new public private key pair can be created, which makes it that much harder to forge than a real physical handwritten signature.