Signatures have helped to authenticate documents since time immemorial. Only you can sign on a particular document, but everybody can make out that the signature belongs to you. This is very similar to the public and private keys, where private-key is analogous to signing and the public-key to verifying the signature. In worldtradesource.com to ensure adequate security, this option is now increasingly becoming popular with most of the trading platforms.
How do you ensure that the contents of the document or file or the data being transferred through the net was not tampered with after you have signed the document?
One way is to encrypt the entire document but this will take a long time to decrypt. A convenient way is to encrypt a message digest, which is generated by applying a mathematical function to the document. Even one character change in the message will result in the message getting changed in an unpredictable manner. The message digest is much smaller than the document and it takes lesser time to encrypt and decrypt. The encrypted message digest is called ‘digital signature’. It is sent alongside the message that is not encrypted.
At the receiving end, first the ‘digital signature’ is decrypted using the public-key to obtain the message digest. Subsequently, using the same mathematical function on the document, a message digest is generated and the two message digests are compared to be identical. If there is a difference, then either the document must have been tampered with or the authorized person has not signed it.
The mechanism discussed so far can ensure privacy, authenticity of source, repudiation by the source and integrity of data communication. The only weak link in the chain is the veracity of the public-key. However, the digital certificate takes care of that. In fx options trading, data security is of utmost importance. In the cut-throat financial market, no trader can ever be complacent regarding this important aspect. On the one hand, big money is involved and on the other hand lot of unscrupulous players are awaiting a chance to play havoc with the system.