The third piece in creating a peer-to-peer trust protocol system is to digitally capture a user’s intent using mathematical principles. This video discusses how digital signatures crystallize intent by using a combination of public key cryptography and cryptographic hash functions.
This introductory material also appears in our Blockchain Essentials course. While we will be going into much deeper technical detail, this is meant to give you an overview of digital signatures.
Up till now, we’ve looked at how blockchains use private keys as a decentralized form of identity and how hashing is used as a decentralized form of file integrity. We are now arriving at the last cryptographic element of our decentralized trust protocol, digital signatures. As the previous section discussed, digital signatures use a combination of the key signing and hashing to create what we’re calling decentralized intent. Let’s unpack what that means.
In blockchain, the signature is made when a hash of the message is signed by the private key of the account holder. (The encryption process is also a hashing process, so it may be helpful to think of the signed transaction as a hash of a hash.) In practice, it looks like a normal hash except it can be decrypted using the sender’s public key to confirm identity. This digital signature acts like a protective wrapping around transaction data, as the simplified image below shows:
a signed blockchain transaction (simplified)
The first, unsigned hash is formed by making a cryptographic hash of the Sender, Receiver and Amount data. The second, signed hash is formed by combining the Sender Receiver Amount and, most importantly, Hash data and signing all those fields.
By creating these two successive hashes, we are creating a series of protective wrappings. A message that has a valid digital signature on it provides three different confirmations. It confirms: * Origin: From what we learned about public key cryptography, we can infer that if a private key digital signature is valid then the signed message really did come from the account associated with the public key. * Message Integrity: From what we learned about cryptographic hash functions, we know that the message has not been tampered with by anyone else * Intent: By signing the first hash, the owner of the private key is signalling their intent to execute whatever commands or agreements are contained in the message.
In the non-blockchain world, the idea of capturing intent may seem fairly useless since you can’t legally force someone to do something they do not want to do. Someone can sign a string saying, “I’ll pay you 100 pounds” but you can’t really do anything with that string. It’s just pixels on a screen.
The real power of digital signatures comes when the message within that digital signature can be executed, say on a blockchain protocol. In fact, the only significant messages in the blockchain world are bits of code that, when signed and validated, can be executed automatically by the blockchain protocol. (If this feels like a leap for you, that’s okay, we’re going to keep explaining it more.)
The decentralization of intent is the last piece of cryptographic primitives in this section. It’s important for capturing intent but it’s also significant because it relies entirely on two other primitives (public key cryptography and hash functions) for its existence. Digital signatures are emergent in this way, arising from simple-yet-powerful features to create something with equal importance. It’s a good microcosm or analogy for the broader ecosystem and yet another example of emergence.
