Digital signature — what it is and how it differs from e-sign

The term “digital signature” is used in two genuinely different ways. Colloquially, it means any online sign-off. Technically, it refers to a public key infrastructure (PKI) cryptographic certificate. Most search engines treat these two meanings as the exact same thing, which isn’t entirely correct. 

While you most likely need a regular electronic signature, knowing the distinction is still critical to ensuring the legality of your documents. This guide resolves all that confusion with a clear decision path.

What most people mean by “digital signature”

In everyday usage, “digital signature” and “electronic signature” are used interchangeably. 

Whenever you have to sign an online form, a lease agreement, or any internal document within your company, you rarely need a cryptographic key attached to it. What you actually need is a quick way to show your consent on a screen. This may include typing your name in a cursive font, drawing your signature with a mouse, or uploading an image of your handwritten sign-off.

From a legal perspective in the United States, this colloquial usage holds up perfectly. Under the Electronic Signatures in Global and National Commerce Act (ESIGN Act), the legal framework does not distinguish between a “digital” and “electronic.” Both terms are valid as long as they demonstrate a person’s intentional act to sign and link that intent to the specific document.

What a “digital signature” means technically

Microsoft defines a digital signature as “an electronic, encrypted, stamp of authentication on digital information such as email messages, macros, or electronic documents.” This is the technical meaning of the term, different from electronic signatures in the traditional sense.

From a technical point of view, a digital signature relies on public key infrastructure (PKI). This infrastructure uses cryptographic keys and digital certificates to verify the signer’s identity and authenticate digital documents. Unlike electronic signatures, where you simply place a signature image on a file, a PKI-based signature brings along encrypted information that can be verified.

Another distinction between an e-signature vs digital signature is that the latter provides four assurances that a standard electronic signature does not:

1. Authenticity — confirms the identity of the person who signed the document
2. Integrity — verifies that the document has not been altered or tampered with after it was signed
3. Non-repudiation — demonstrates that the signer has signed the document, making it highly difficult for them to deny it later
4. Notarization — includes trusted timestamps and additional verification measures that carry notarization validity under certain conditions

Despite its advanced security, a PKI-based digital signature is rarely required for everyday paperwork. It’s only needed in specialized situations, such as:

• Government contractors requiring Personal Identity Verification (PIV) card signatures
• Certain financial, healthcare, or other heavily regulated institutions
• EU businesses requiring a Qualified Electronic Signature (QES) under eIDAS (electronic IDentification, Authentication, and Trust Services) regulations

For everyone else, a standard electronic signature is usually sufficient.

Which type of digital signature do you actually need?

If you’re unsure which suits your use case better, a digital signature vs electronic signature, we’ve got you covered. Here are three questions to help you determine whether you need a PKI certificate or a standard sign-off:

• Question 1. Is your document being submitted to a US federal agency that specifically requires a PIV-card-based digital signature? If you’re sending your documents to a US federal agency or any other organization that explicitly states they need a PIV-card-based digital signature / certificate-based authentication, use a PKI certificate.
• Question 2. Are you in the EU and required to provide a Qualified Electronic Signature (QES)? If you are in the European Union and your document demands a QES under eIDAS regulations, reach out to an authorized Qualified Trust Service Provider to authenticate your identity.
• Question 3. Are you signing a typical business or personal document? If you are signing contracts, NDAs, HR forms, leases, consent forms, or similar documents without the additional requirements we just mentioned, choose a standard electronic signature.

How to create a free digital/electronic signature

If you’ve determined that you don’t need a costly, compliance-specific PKI certificate, you can sign your document using a free online tool. In most cases, it’ll take you less than two minutes to create your digital signature online. Here’s how you can do that via CreateMySignature:

1. Go to CreateMySignature. Open our tool in your web or mobile browser.
2. Choose your signing method. Decide whether you want to draw your signature with a mouse or touchscreen, type your name in and choose a cursive font, or generate your signature with AI.
3. Download your signature. Once you design your signature, click the download button to save your signature image as a transparent PNG.
4. Insert into your document. Use your electronic signature across different documents (add e-signature to PDF, sign Word docs, online forms, and so on). Then, continue into PandaDoc to get a legally valid e-signature with an audit trail.

If you’re dealing with a multi-party contract that requires a full audit trail, your flow should be slightly different. First, generate a signature image in CreateMySignature following the steps above.