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hey everybody how's it going back here with another video for you made it to 300 subscribers so that's pretty exciting to me so thank you to all my subscribers so I didn't just make this video to say that we have an actual topic today so today we are talking about digital signatures and how it relates to Bitcoin and how it relates to signing transactions the reason why I wanted to make this video is because when I was online reading you know the forums and the discussion groups and reading articles and crap like that I saw a lot of people referencing the idea of signing a transaction and all I understood about this concept of signing a transaction was the fact that by signing a transaction you are verifying that it is a legit transaction and that this person who is signing it is the rightful owner of the bitcoins that are referenced in the transaction and this concept applies to pretty much any cryptocurrency out there so what we could be talking about etherium or fedora coin or happy coin it could be any of those it doesn't matter they all run on the same concept in this in this case so in order to understand the concept of what is a digital signature and what does it mean to sign a transaction we have to understand public key encryption so the essential concept of public key cryptography is that you start by taking a random input and you generate a pair of keys a public key and a private key the public key as the name suggests is public and anyone can see it the private key as the name suggests is private it's secret only the owner of the he should ever be able to use it and see it just as an aside what I mean by key is it's basically just a string of numbers and letters that are special because they have special properties which I will get into right now so we've got this key pair a public key and a private key everyone can see our public key only I can see my private key hopefully if I am NOT terrible with my security and what can these keys be used for well in real life a key is used to lock something or unlock it and that's essentially what these keys do so basically what you can do with these keys is that you can use them to encrypt things so say we have a message which is just a generic term for a piece of data so we have this message what we can do is we can take our public key and we can encrypt the message and then the only thing that can be used to decrypt it is the private key so you encrypt it with public key decrypt it with private key but what you can also do is you can use the private key to encrypt the message and then it can only be decrypted by the public key so you're able to do it both ways so this is a very very important concept for you to understand so really burn that into your memory and keep it with you forever the reason why it's important is because public key cryptography is the basis of you know a huge amount of encryption technology and you know Bitcoin would not be possible without this technology so now that we have a basic understanding of public key encryption public key cryptography how does this relate back to a digital signature what is the digital signature if we think about a normal signature what function that serves is that it is basically a proof that someone has agreed to something or someone is okay with something and you put your you're totally unique thing that no one else can do onto a piece of paper and that somehow proves that you're you know agreeing to whatever is on the paper so that's a real-life signature a digital signature you know obviously serves a very similar function because why would they call it a digital signature if it did something completely different that just be stupid here's what a digital signature is the digital signature is essentially where you take your private key and use it to encrypt a message and so what is the result of that so as we remember if you encrypt something with your private key then it can be decrypted with the public key but then you might think what's the use of that everyone knows my public key why would I bother encrypting something when everybody has the key to decrypt it well what it does is that it is a signature because if a message can be decrypted with your public key then that means that the only way it could have been encrypted was with your private key and the only person who has your private key is you so then everyone has to know that you are the person that encrypted this message so basically it functions the exact same way as a real signature because no one else could have done it you're the only person with your private key so that's very very cool and it's the basis for signing a transaction on the other side of it if you use somebody else's public key to encrypt a message that makes it so they're the only person who can see the message because they are the only person who can decrypt it because they're the only person who has their private key but that's not important for this video it's you know important concept but in terms of signing transactions it's not what we're talking about we've got public key encryption you know you thought concept is cemented into your mind we got digital signatures you understand that now and I'm sure you're very excited by this new knowledge that you've acquired now we get to the idea of signing a transaction and you may already be able to see where this is going essentially when you're signing a transaction you are using your private key to encrypt parts of the transaction I'm not going to get into exactly the structure of how what and how it is encrypted with in the transaction because it gets extremely complicated and technical and I could probably spend you know 30 minutes breaking that down but essentially you're using your private key to encrypt parts of the transaction which is basically you putting your digital signature onto the transaction and it's you signing the transaction and thus and so it's you verifying that you are the owner of this bitcoins associated with this public key because you're using the private key to encrypt things so I guess that's the the whole concept hopefully this video made sense and was somewhat informative I hope you enjoyed the video drop a like or subscribe if you feel like you're feeling you know generous today and you know tune in for some more videos that some later points in the indeterminate future and