Part I - Foundations
By Your Cryptocurrency Expert
Early one Saturday morning last month, a blockchain developer I mentor messaged me in a panic. His team's DeFi protocol had narrowly escaped a $3.2 million theft attempt. The attacker had crafted transactions with manipulated signatures that nearly passed validation, targeting a subtle implementation flaw in their signature verification logic. What saved them? A seemingly "overly cautious" security check another developer had insisted on adding during code review—proper ECDSA signature malleability protection that many teams overlook.
This near-miss highlights why mastering digital signatures and PKI isn't just academic—it's the bedrock of cryptocurrency security. Let's explore these foundations with clarity and precision to strengthen your projects against similar threats.
The Cornerstone of Trust in Trustless Systems
Digital signatures in cryptocurrency serve as the mathematical proof that only the legitimate owner of funds can spend them. While that may seem obvious, the implementation details harbor subtleties that have led to numerous vulnerabilities over the years.
How Digital Signatures Actually Work
A digital signature combines:
A private key (known only to you)
A message (transaction data)
A mathematical algorithm (like ECDSA or EdDSA)