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What Is a Digital Signature and How It Works Digitally signing your document is not only faster and more convenient than the traditional way of signing but brings with it an added perk of safety. In this article, we will be discussing digital signatures definition, among other things

By Caroline Lee

Opinions expressed by Entrepreneur contributors are their own.

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The coronavirus pandemic crept upon us like a sneaky raccoon, catching us unawares and destabilizing many business processes within a short period. The lockdown restrictions didn't help either as many businesses either had to temporarily close down or adopt work-from-home friendly technologies.

Using digital signatures, some small, medium and large brands have still been able to go about businesses normally. In fact, for some businesses, the lockdown restrictions have been a blessing in disguise as it has opened their eyes to a more efficient way of processing paperwork and transactions.

This article addresses questions like what is a digital signature, and how to do a digital signature, among others.

What is a digital signature?

A digital signature is a mathematical algorithm that is used to verify a document signer's identity and monitor the integrity of digital documents. It provides finer details of the digital documents including the message's origin, status and consent by the signer. They create an electronic fingerprint that is unique to each document signer.

Many businesses have integrated digital signatures into their business workflow for the following reasons:

Security: Documents with a digital signature are less likely to be forged or modified post-signing compared to those signed with traditional wet-ink. Once a document that has been digitally signed is modified, the signature becomes invalid. The signers' identity is also verified before they can sign the document.

Improves efficiency: With digital signs, you are less likely to waste time on signing documents. You can also monitor and track documents to be signed better. This goes a long way in improving the efficiency of workflow.

Saves cost: The traditional way of signing documents incurs a lot of costs like printing and mailing costs. Looking at these costs independently, they may look negligible, but they eventually add up. Digital signing snuffs out these transactional costs. You also save a lot of other indirect costs like cost of filing, tracking, archiving and rekeying data.

Click here to know more info about digital signature>>

Digital signature vs. electronic signature

Unlike electronic signatures, digital signatures employ the use of mathematical algorithms to verify the signer's identity. Electronic signatures on the other hand, are simply used to digitally capture a signer's intent to sign. It may be an electronic mark, symbol, sound or writing.

The major distinction between both forms of signature is that digital signatures use a Personal Key Infrastructure (PKI) to identify both the individual signing a document and the other party requesting the signature while an electronic signature doesn't.

Of worthy note is that both electronic signatures and their digital counterparts are legally binding. Electronic signatures are also the most used of the two. Digital signatures are mostly used in critical financial transactions and transactions that need an extra level of confidentiality and security.

How to do digital signature with CocoSign

Signing documents with CocoSign is even comparatively easier. This is especially true because the platform is simple to navigate. CocoSign is an easy-to-use platform that makes the signing process enjoyable. It is patronized by many businesses because of its customizability, support for a wide range of document formats, flexible workflow arrangement and easy document management.

Most importantly, its processes are in sync with the best industry security standards and protocols like PCI DSS certification, HIPAA compliance, 21 CFR Part 11, SOC 2 Type 2 Certification and GDPR compliance. It is for this reason that it is patronized by many fintech, financial, legal and insurance companies that are particular about document confidentiality.

Choose file: The first step to digitally signing your document is uploading it to the platform. To do this, visit the official website and navigate to the electronic signature page. Locate the document to be signed from another window on your local device, then drag and drop it within the highlighted window on the platform. You can also click the "choose file' button.

This takes you to your file manager from where you can pick the document and upload. CocoSign also allows you to upload documents previously stored on cloud storages like Box, Google Drive, OneDrive and Box.

Add signature field: Proceed to esign the pdf. If the document is to be signed by a single person, leave the "I'm the only signer box" checked, and click the "Next" button. Taking this action should take you to the "Add fields" section where you will be prompted to add a signature field.

If the document has multiple signatories, uncheck the "I'm the only signer" box and click the next button. This should take you to the "Add recipients" section where you should enter the email and name of recipients required. You can also enter the details of recipients who should get a copy and many not necessarily sign.

Sign document: Choose from the available options in the signature field. These options include type your name, draw your signature or upload a scanned image of your signature. You can draw your signature using a touch pen, mouse or trackpad. Once you are done signing, click "save" to accept changes to the document.

Download: Click "Next" to go to the download page. Here, you can choose to either download the signed document on your local device or send it by email to others.

How does digital signature work?

Understanding the algorithms and processes involved in digital signing namely hash function, Public Key Cryptography, Public key Infrastructure, Certificate authority (CA), and Pretty Good Privacy (PGP)/OpenPGP is key to getting a hang of how digital signatures work.

Hash function: This is a fixed-length string of letters or numbers produced from a mathematical algorithm and is unique to the file to be signed. Generally, the contents of the document to be signed digitally is hashed and encrypted. Changing any part of the document completely changes the hash.

Public key cryptography: Also known as asymmetric encryption, this cryptographic method uses both public and private keys to ensure safe delivery of the contents of a document from the party requesting a signature to the other party providing the signature. The document's contents are encrypted by the public key and decrypted by the private key. Once the digital message is encrypted by a public key, only an individual with the corresponding private key can decrypt that data.

Public Key Infrastructure (PKI): In simple terms, it is an aggregation of the people, standards, policies and systems that back public key distribution and validation of identity using certificate authority and digital certificates.

Certificate Authority (CA): Usually a third party, a certificate authority is responsible for validating the identity of a person. To do this, it generates a pair of public and private keys, both of which are used to verify the identity of the signer and the recipient. The CA then issues a digital certificate they signed once they have been able to establish the identity of the signers.

Digital certificates: They are signed by the CA and used to identify the identity of the certificate's holder. They also contain the public key and other important information about the individual, organization and CA.

Pretty Good Privacy (PGP)/Open PGP: This is one of the most explored alternatives to PKI. It is based on a concept called the "Web of Trust". Essentially, users give other users a vote of trust by signing certificates of people with identities that are verifiable.

Digitally signing a document is dependent on the standard format called PKI. Using this PKI, a digital signature provider generates a public and private key pair. The contents of the document to be signed is hashed and encrypted using the private key. This key should be kept securely by the signer. The public key, on the other hand, is used by the recipient to decrypt the document's contents.

Once an individual signs a document, a hash value is produced. The signer then gives the recipient access to the public key to decrypt the contents of the message, a process that creates another hash value. If this hash value does not match or correspond with the hash value from the signer, the document would not open. If it does, the document opens and the recipient can sign.

The function of the CA is to verify that the signer is who they claim to be. The public key can be sent to the CA along with details of the signer to carry out this verification. The CA then issues the signer a digital certificate containing the signer's details (if correct) along with information about the CA and the expiry date of the digital certificate.

To help the recipient know that the signer is who they claim they are, the signer can send along with the document, a copy of the full certificate. Should the recipient trust what is issued by the CA, they can go ahead to sign the document. Essentially, the CA vouches for the signer, establishing that they are who they say are.

Click here to check how to create an electronic signature>>


Digital signatures are more convenient, boost efficiency, encourage remote work collaboration and are an asset where security is of the essence. This is in stark contrast with traditional wet-ink signatures that need all parties involved to be physically present to sign papers, and aren't exactly fool-proof. This article gives a detailed brief of what they are and how they work.

Caroline Lee is the co-founder of CocoSign, a web-based electronic signature solution that helps SMBs and professionals get contracts signed right and 5x faster. 

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