A digital signature is a cryptographic mechanism that proves the authenticity and integrity of a blockchain transaction. It is created using the sender's private key and can be verified by anyone using the corresponding public key.
How It Works
1. Signing: When you send crypto, your wallet uses your private key to create a unique signature for that specific transaction.
2. Verification: Network nodes verify the signature using your public key, confirming that you authorized the transaction and that the data hasn't been tampered with.
3. Non-repudiation: Only someone with the private key could have created the signature, proving authorization.
Key Properties
Authentication: Proves the transaction came from the claimed sender.
Integrity: Any modification to the transaction data invalidates the signature.
Non-repudiation: The sender cannot deny having sent the transaction.
Algorithms
Bitcoin uses ECDSA (Elliptic Curve Digital Signature Algorithm) and Schnorr signatures. Ethereum also uses ECDSA. These algorithms are specifically designed to be computationally infeasible to forge.