Know the Difference: Digital Signatures vs. Electronic Signatures

While most people have used these terms interchangeably, these two are mutually exclusive. In reality, eSignatures and digital signatures are not the same.
Digital Signatures vs Electronic Signatures

Suppose you're a freelancer, a business or startup owner, or even someone who deals with contracts online. In that case, chances are that you have previously heard of digital signatures and electronic signatures. While most people have used these terms interchangeably, these two are mutually exclusive. In reality, electronic signatures and digital signatures are not the same.

While digital signatures and electronic signatures are both ways in which we can sign documents and contracts without the need for pen and paper, there are critical differences between them.

What is a digital signature?

Say hello to the world of digital signatures and goodbye to messy handwriting and lost documents! With the power of digital signatures, our online transactions have become more secure, and our identities have become even more protected.

So what exactly are digital signatures, and how do they work? In simple terms, digital signatures are a form of authentication that allows users to sign documents electronically instead of marking them in person. For this reason, digital signatures are a crucial part of the digital world. They are used to authenticate and validate digital documents and messages, ensuring no forged signatures or alterations to the paper after it has been signed.

Digital signatures are beneficial when we need to prove that we are who we claim to be or when you must prove that documents haven't been altered after they were signed. For example, suppose you sign a contract on paper. In that case, anyone with access to the form could change it before signing it themselves and claim they were the original signer. A digital signature solves this problem by ensuring that no one can alter the contents of a document after it's been signed using cryptography.

How do digital signatures work?

This type of electronic signature is used following the E-Sign Act. It is created by applying a unique algorithm to an encrypted document using a special cryptographic code or hash. The process begins with a unique digital identifier for the paper that can only be unlocked using the corresponding public key.

The process creates a unique digital identifier for the document that can only be unlocked using the corresponding public key. This allows anyone with access to the document to verify its authenticity without having access to the private key. When the document or message is received, the digital signature is checked against the code attached to it to verify our identity. If the codes match, the paper or letter is authenticated, and our job is done!

But then, what is an electronic signature?

eSignatures are becoming increasingly popular for us as businesses and individuals. An eSignature, also known as an electronic signature, is an electronic version of our traditional handwritten signature.

An eSignature is an electronic means of attaching our signature to a document as evidence of approval or consent. Even more so, an eSignature is when we are signing documents electronically using software programs such as Adobe Acrobat Reader or Microsoft Word. These programs allow us to digitally sign documents and then email them back to the recipients without the stress of having to print out copies and fax them to be considered valid by courts.

With eSignatures, the process of signing documents has become a lot more efficient compared to the old-fashioned paper-based process. Now, there are no more papers to print and sign, there are no more physical copies to send by email, and especially, we are not wasting any more time. The electronically signed documents are signed, encrypted, and stored in a digital format in a secure, cloud-based system, making them instantly accessible.

How do electronic signatures work?

eSignatures can be an image or video file attached directly to an email or electronic document. Even more so, they may be generated by software programs running on devices with touch screens. These software programs can interpret our input gestures, such as a finger drawing a signature on the screen.

The process of using an eSignature is relatively straightforward. After the document is created, we, as the signer, are instructed to click on the "sign" button and enter our name, email address, and other required information. Once the document is signed, it is quickly and securely stored. This eliminates the need for physical paper documents and makes it easy for us to share documents with others.

So when should I use a digital signature, and when should I use an eSignature?

Suppose we are signing a legally binding document or any other high-security situation. In that case, we will want to ensure that our signature is secure and can not be easily forged. That's where digital signatures come in. This type of electronic signing is used to ensure the integrity and confidentiality of data, making it a powerful tool for protecting sensitive information. Even more so, digital signatures provide legal protection, as they may be used to prove that the intended sender signed a document or message.

For example, imagine that we are signing a contract to rent a new apartment. In this case, we would use a digital signature to ensure that the signed document is legally binding and cannot be tampered with.

However, eSignatures are like signing our names on paper without going through the trouble of using an actual pen and paper. Therefore, if we are signing up for a newsletter or signing a permission slip for our kid's school trip, an eSignature is sufficient. While eSignatures might not be as exciting and impressive as digital signatures, they are more accessible and convenient than handwritten signatures.

Digital signatures and electronic signatures are two ways to sign documents and contracts electronically. Still, we have seen that they are not the same. While both methods can save time and make signing documents more convenient, only digital signatures provide the same level of security and authenticity as traditional handwritten signatures. However, ultimately, it is up to us to decide which electronic signature is proper for us.

Whether signing a top-secret contract or just filling out a form, it is clear that digital signatures and eSignatures can make our lives easier and more secure. So start using any electronic signing and embrace the future of document signing!

Gabriel Pană
May 8, 2024

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