What is digital signature

Digital signature - what is a digital signature?

A digital signature, electronic signature or digital signature replaces the manual signature on an invoice and is created digitally. The digital signature is used by the invoice recipient to identify the sender.

The question of whether invoices also have to be signed repeatedly leads to confusion. Find out here why an invoice is also valid without a signature.

A digital signature is an electronic signature with which the recipient of an electronic message can uniquely identify the sender.

The digital signature can be created using a computer or online. It thus serves as a substitute for the manual signature that senders traditionally use to prove their authenticity.

The digital signature and its advantages

The digital signature offers many advantages, especially for the public sector, because it enables authorities, for example, to receive forms automatically and directly via an online system.

Benefits for the recipient:

  • Time savings through more efficient processing of electronic data
  • Cost savings due to the omission of copying and sorting
  • More security through forgery-proof signature

Advantages for the sender:

  • Time savings through online submission of forms and applications instead of post
  • Cost savings by eliminating printing and postage costs
  • More security through forgery-proof signature

How the digital signature works

The digital signature allows the recipient of a message to verify the signature and authenticity of an electronic message.

This makes it practically impossible to forge a signature. In addition, the digital signature gives the recipient the assurance that the sender's signature is legally valid and non-controversial.

Digital signature: the principle of asymmetrical encryption

To guarantee the security of the digital signature, a special principle is used: asymmetrical encryption.

How asymmetric encryption works

Two keys are usually required to encrypt messages: one to encrypt and another to decrypt. An encrypted message is initially illegible and can only be made readable again by decryption.

Mathematical procedures should ensure that the “encryption key” cannot be deduced from the “decryption key”. This property allows the potential recipient of a message to publish his encryption key.

The sender can then write a message and encrypt it with the recipient's public encryption key, so that the message can only be read by the recipient using the recipient's private decryption key.

Asymmetric encryption for digital signatures

Popular asymmetrical processes for digital signatures work like encryption processes, only that they run “the other way around”.

The usual procedures for digital signatures are based on procedures based on asymmetric encryption. Here, however, the encryption key is private, while the decryption key is public.

If the key for encryption is only used by one person, the recipients who make the messages readable with the appropriate encryption key can be sure that the message originates from the owner of the encryption key.

Application areas for the digital signature

Digital signatures are used in many cases, especially in legal traffic and tax-relevant areas:

  • Online processing of public tenders
  • Electronic right-hand traffic
  • Online dunning
  • Tax return online (Elster)

Until 2011 it was also necessary to provide an electronic invoice with a digital signature. This is now obsolete: an invoice is also valid without a digital signature.