Digital Signature – Workings & Benefits
A document is not valid if it is not signed. There are hundreds of contracts you may enter into, whether you are a startup or an existing business. Each such document requires a genuine signature to prove its legality.
However, the technological advancement or progress is admirable. No more do you need to sign a document with your hand. What if you want to send the documents to another country? You can imagine yourself going through a lot of paperwork! Cryptography has revolutionized the world which ensures that the message is encrypted and not prone to security attacks. The trust factor is no more an issue. Don’t you think you should familiarize yourself with the concept of the digital signature?
What is Digital Signature?
In a layman’s language, a digital signature is a way to ensure the authenticity of the documents: that you are sending to the intended recipient. On the surface, it may look like a signature, but it is much more than that. It employs various techniques to encrypt the data. Cyclic Redundancy check, Password-checksum, private key encryption, public-key encryption; are some techniques, to name a few.
Why authenticity and data integrity are vital?
Authenticity ensures that the sender is the one who was responsible to sign the document and not a fraudster. Forgeries are not an issue with Digital signatures.
Data integrity is a way of ensuring that the message sent is accurate. Sometimes, hackers can decode the message and add or manipulate messages. Integrity solves the problem of data manipulation, thereby rendering the message accurate.
How does Digital signature work?
The working can be explained in brief. For instance, Ajay signs a document digitally using a Digital Signature Certificate to be sent to a receiver abroad. When Ajay plugs in the DSC to digitally sign the document, various processes happen:
– The mathematical algorithm encrypts the message that Ajay wants to send abroad (in this case, the document data).
– The message is encrypted in the form of a 128/256-bit hash value. The private key of Ajay or the DSC encrypts the hash value. Now the document is digitally signed.
– The receiver abroad must possess a public key of the sender. Remember that there are two keys in the case of Digital signature-private and public. This is also popularly known as Public Key Infrastructure.
– The public key then generates another hash value- and compares it with the encrypted hash value of the sender.
– If both values match, it is a bingo!
Benefits of Digital Signature
- It provides a very high level of security that minimizes the risk of data tampering to almost nil and prevents any cyber-attack.
- It is user-friendly and intuitive to use. You do not need to be an expert to sign the document digitally.
- It is very convenient for the businesses that are geographically distributed. One branch can communicate with others through digital signatures.
- Digital signatures render a certificate authenticate. The underlying data is not tampered with. If the data, is modified in any way, the digital signature gets invalid. In such cases, once again, the document needs to be signed.
- A lot of time and unnecessary costs- are saved through digital signatures.
- The use of digital signatures implies that the company is using technology effectively.
- It will help ensure legal compliance. For instance, in India, the Ministry of Corporate Affairs (MCA) mandates- the use of DSC to sign company documents to be sent to the Registrar of Companies of the relevant states. Other countries may have such requirements too.
Digital signatures are electronic fingerprints that are unique to each individual. If your business has not started using Digital signatures, it is time to shift towards this technology.
