For a while, digital signatures have provided integrity, non-repudiation, and authentication to access the data transferred electronically across networks. Digital signatures are common in emails and other systems and are created using a mathematical algorithm. The algorithm creates a hash (“signature”) of the contents of the message and information stored in the key.
Digital signatures have turned into a key control across organizations’ security strategies. Supported by the use of certificates and complex mathematical algorithms they provide authenticity of data and shielding forgery.
Blockchain enters the scene by appending the business ledger aspect, facilitating multiple signatures, fingerprints, and/or timestamps, and distributing information across multiple systems in a network as opposed to a centralized server.
Blockchain creates the highest value in the “proof-of-work” concept – transactions cannot be rolled back or tampered with. This greatly secures transactions and signature technologies.
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Digital Signature – Centralized v/s Decentralized
Today digital signature has as hard a legal standing as you may find in any document signed physically by an individual. However, in practice, it may be challenged on a number of grounds. A digital signature can be created on almost any computer. To actually verify its authenticity, however, is a task.
For digital signatures to be valid and legitimate, it would require public data stored on central servers to identify the signee from his/her digital signature. And central repository of public data, we know, is prone to hacks.
Also, if a person is regularly signing deals with different persons, they must register themselves with several chargeable services and share their private data with each.
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A Decentralized Architecture
A decentralized architecture solves the problems quite simply. Blockchain structure democratizes digital e-signatures making them public. This is so that all participants can unambiguously link back to the contractors with whom they had some business.
This architecture entails:
- The private key is to be stored only with the user. Even if something were to happen to the infrastructure — the private key and private data of the user still remain concealed.
- Identifying yourself publicly. The main difference lies in the user not saving his personal data in a public repository in clear or even encrypted format. He or she saves a ‘digest’ of this data. This assures that, only the owner is in the knowledge of his/her stored data.
There is considerable cause for concern that the private data provided by each user may not trace back to the actual user. Serious contracts in such cases demand some third party, to validate each participant and their data. Centralized systems call in an agent, to verify and validate the identities and accuracy of the facts.
Decentralized systems enable anyone to be that agent. For instance, if X knows Y, personally, X can simply validate private data for Y, acting as a validator. In a wider sense, practically any KYC provider or valued organization that X might be a part of can become the agent for validation.
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Simplification at the Core
What drives blockchain solutions in general, is its strife for simplification of real-world convolutions. Striking complexity at the heart is the beauty of blockchain. Democratization of digital signatures is yet another way of blockchain attempting to straighten out real-world pain.
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