[Edu] Digital signatures

[Hypnotizer]

I got the inspiration to write dis post from dis post Transactions Are Just Digital Signatures …so I can clear the OP’s misconception likewise other beginners, about digital signatures in a more clearer way even though Mia Chloe and Ambatman have provide some explanation but my explanation will go a bit deeper into it. And also I been wan explain Wetin digital signatures mean before that post but I was not opportune to do so, so this thread will cover both.


To clear this misconception let’s know what a crypto transaction means.

Wetin be Crypto Transaction?

A Crypto Transaction nah data structure wey dey command transfer value from one address to another on the blockchain.

Just as Ambatman don mention for dat thread

-snip Digital signatures are part not all of the subsets of a transaction.
We have inputs, outputs, meta data and digital signatures.
So it would be better to state Bitcoin ownership and transfer are enforced through digital signatures.

The main component of a Transaction nah transaction input, transactions output and meta data , the digital signature is part of the transaction input. Let me elaborate more..

1.Transactions Input: e contain the previous unspent transactions outputs (UTXOs) wey you wan spend together with your Unlocking script (ScriptSig); your digital signature and your public key dey inside dis ScriptSig.

2.Transactions Outputs: e contain the receiver’s bitcoin or crypto address, the amount wey dem go send go dat address together with your Locking script (ScriptPubKey) wey you go require to show say your digital signature match your public key. Each output dey create a new UTXO.

3.Meta data: nah dis one dey contain things like transactions fee, transactions version and locktime (for time-locked transactions) and other additional transactions details apart from the basic transactions information.



You don see naw say transactions get things way more than just digital signatures, but digital signatures dey important for transactions just like how an engine dey important to a car


Naw make I use dis opportunity explain Wetin be digital signature gon gon..

Wetin be Digital Signature?

Digital signatures for basic meaning nah the cryptographic proof wey dey proof say nah you by yourself dey authorize transactions. E dey important for doing these three things:

1.Authentication: e dey prove say the pesin wey wan spend the bitcoin get the private key wey dey linked to that public key.

2.Integrity: e dey make sure say dem no touch any transaction details after you don sign am. Digital signatures dey help integrate transactions making sure say dem no tamper am.

3.No Rejection: e dey make sure say as you don sign transaction, you no go fit deny am again. Nah why dem dey advice make pesin dey triple check transactions before confirming it because e dey irreversible.


How e dey work

Digital signatures dey work through Elliptic Curve Digital Signature Algorithm (ECDSA). E dey very technical but make I break am down…

•First of all, when you wan send bitcoin, your Bitcoin wallet go take the transaction data and a nonce (a special number) and join them together through one-way hashing. The hashing process go create a unique Fingerprint of your transaction.

 After that then your wallet go com use your private key to mathematically sign the transaction Fingerprint. Nah dis process dey create the Digital Signature.

Then after the creation of the digital signature, the transaction together with your digital signature and your public key go dey broadcasted to the network.


•When other Nodes on the network com receive your transaction, dey go take the transaction data, do the same hashing just as your wallet do before by dem sef to get their own Fingerprint.

After that then, dem go use your Public Key and the Digital Signature wey you create to verify say dem use the Private Key wey dey correspond to your Public Key create the digital signature and to verify if e match the transaction fingerprint.

If after all dis processes, everything com correspond, then the transaction is considered valid and e go dey added to the next block.




Did I make a mistake in my writeup? I’m open for corrections.

[Ambatman]

This is great and understandable. I admire how you could do it with pidgin.

The main component of a Transaction nah transaction input, transactions output and meta data , the digital signature is part of the transaction input.

Yes, They are contained or found in the input but had to separate it so the OP would know that digital signature don't make up a transaction alone.

Did I make a mistake in my writeup? I’m open for corrections.

I won't call it a mistake perse but transactions fee ain't in the metadata
No they ain't even stored in the transaction at all.
The transaction fee is arithmetic, the difference between total input and total output
Hence why fees are not found in transaction ID despite affecting it.


I think Ethereum TX contains gas fees but it's different from Bitcoin. Great write up by the way.  

[Mia Chloe]

~snip

Well your explanation is nice. Your pidgin is readable and your explanations are clear well especially for beginners but there’s something I'd actually like to correct. Digital signatures don’t go inside the ScriptSig anymore for most modern bitcoin transactions and it's because almost all wallets now use SegWit and Taproot where signatures are stored in separate witness data and not in the traditional ScriptSig.

Aside from that I believe your breakdown of inputs, outputs, metadata, and how ECDSA signatures work is fine by me.