Digital Signatures

A digital signature is created by hashing a message and encrypting the hash with your private key. Anyone with your public key can verify the signature, confirming both the sender's identity and that the message hasn't been tampered with. In blockchain, every transaction is digitally signed. ECDSA (Elliptic Curve Digital Signature Algorithm) is the standard used by Bitcoin and Ethereum. Newer schemes like Schnorr signatures (adopted by Bitcoin in the Taproot upgrade) offer advantages like smaller signatures and native multi-signature support.