Blockchain is a series of time stamped data records that link together, forming the “chain”. To create transactions, a hash of the previous transaction is recorded and the public key of the recipient is used by the signer, along with the private key of the signer. All transactions require the signer to have their private key; without this, you are out of luck – no transaction.
Blockchain’s intent is to replace an external, trusted third party (including the need for certificate authorities), and also prevent anyone from being able to go backwards and cover their tracks if they corrupted an entry. The technology works on the following properties:
- Log replication – To create resiliency, log-based replication is increasingly used for distributed systems to replicate logs to all peers in the network.
- Provable Value Chain – The values stored in the blockchain can be digital currency (such as the widely known Bitcoin), data, documents, and other assets. Hash chains are kept for each block providing a history of changes, which helps protect data integrity of the block asset.
- Public-key Cryptography – Blockchain uses different types of cryptography including ECDSA and elliptic curve to authenticate transactions.
- Decentralized transaction ledger – The ledger is blockchain and is maintained without a central authority, and acts as a decentralized reconciliation system.
How digital signatures and blockchain can work together
Digital signatures have become a key control in many organizations security strategy, relying on the use of certificates and complex mathematical algorithms to provide authenticity of the data and protection against forgery.
Blockchain enters the mix by adding on the business ledger aspect, allowing for multiple signatures, the creation of fingerprints and/or timestamps, and distributing information across multiple systems in a network verses the centralized server.
Blockchain adds the greatest value in the “proof-of-work” concept – transactions cannot be edited or removed, which greatly secures transactions and signature technologies.
Where blockchain can benefit greatly is by the use of secure, private keys in place of the public keys currently used.
While transactions are very secure and essentially tamper-proof, they are also very public. While the transparency can be an auditor’s dream in many cases (such as in financial organizations), the lack of privacy can prevent organizations from fully adopting blockchain where strict privacy requirements must be met.
By using private keys between the signer and the recipient, data transactions can be maintained by only approved parties – thus making it a very viable option for any sort of data transaction imaginable.
By putting business licences, property titles or birth certificates on the blockchain, governments will enable citizens to digitally conduct transactions without lawyers, notaries or queuing at government offices
Application of Blockchain Signature
A bill in Arizona that recognizes blockchain signatures and smart contracts has officially become state law.
The measure was first introduced in early February, seeking to enshrine signatures recorded on a blockchainand smart contracts – self-executing pieces of code – under state law. Specifically, the bill aimed to make those types of records “considered to be in an electronic format and to be an electronic record”.
That effort is complete, public records show. Arizona Governor Doug Ducey signed the bill on 29th March, just two days after it was sent by the state’s Senate. Senators cleared the bill on the 23rd by a near-unanimous vote, after Arizona’s House of Representatives advanced the bill in late February.