Tag Archives: Digital Signatures

Digital Signatures and the fallacy of Good, Cheap and Fast.

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It is common to hear you can choose two of the following, “Good”, “Cheap” or “Fast”. While there is clearly some truth to this, it is not an absolute truth.

This is especially true in the context of Digital Signatures in the United States where the law allows for parties to agree to rely on virtually any mechanism to capture an agreement.  The rationale behind this is that in the event of a dispute it is the claimant in the dispute who will need to prove consent, as such, it is the parties of an agreement who must assume the burden of choice.

This introduces economic incentives to the decision-making process, specifically, it encourages you to consider which digital signature solution to apply to a given problem. This is an inherently good goal because over-specification in regulations can create market forces that result in the wrong solution being applied to a given business problem.

This flexibility also has downsides, specifically when people look to build a product to enable digital signatures this flexibility diminishes the economic incentives for them to build the most secure solution. Instead, their goal becomes to build the solution they think they can sell with minimal investment.

This, in theory, should still encourage providers to build a strong solution in that, if documents signed with their product end up being thrown out in court their business will ultimately fail. The problem with this motivation is that it can take a decade or more for this to become a concern that can hurt their business. As such, they double down on the creation of a solution that can be taken to market quickly.

It is easy to see this play out in the US Digital Signature market, the large majority of solutions do little more than produce an image that looks like “a signature” and then embeds it into a document. In the European Union, they call this a “Simple Signature”. To produce a fraudulent signature with such a scheme you typically need to select the signature with your mouse, right-click, select copy and then paste the image into the fraudulent document. These solutions are typically very easy to use and cheap to build but is clearly not a technique you would want to use on an agreement that might need to be enforced in a court of law.

Some solutions try to make these Simple Signatures stronger by taking a hash of the document with the signature in it and placing it in a database on their servers. This is done so that in the event of a dispute you can ask the service provider to go to court with you and act as an expert, stand by your side, and say “the hash is the same one we saw when they signed the document”. This is better than the pure image approach but not by much. This is true if for no other reason than they are unlikely to assign legal support to every contract dispute that happens involving contracts signed with their service. Additionally, if the legitimacy of the contract is put into question and the site has had any security incidents at all since it was signed, the claims they make would be questionable at best.

Other Simple Signature solutions try to mitigate these issues by applying a cryptographic notarization to the document after the basic Simple Signature was applied. This adds the concept of a trustworthy notarization of when the document was signed and to some degree, makes the document capable of standing on its own. Now if the original electronic document was produced with standards-based software anyone can confirm it has not been tampered with since it was produced. This helps you reduce the legal exposure relating to a compromise of the signing service which certainly helps with the enforceability but it does not eliminate this risk. This is because a slightly more difficult compromise of the service could still result in a bad actor producing a false document.

The next step up in enforceability is generally referred to as an “Advanced Signature”. These Advanced Signatures almost always start as a “Simple Signature” but they will also include signing the document with a cryptographic key under the sole control of the signer. This provides assurances that it was the user, and not the digital signature service, that signed the document.

Practically speaking the final step in enforceability when it comes to digital signatures is referred to as a “Qualified Signature”. This builds on the previous two types and of signatures and adds in two requirements. The first of which is that the key to being managed on a specialized cryptographic appliance such as a smart card or hardware security module. The rationale for this is that signing keys are typically long-lived and keys stored in software are exposed to theft. This is important because if an attacker steals one of these keys then they can produce fraudulently signed documents with it. The second requirement is that a the legal identity of the signer needs to be verified and included in the digital signature. This is in contrast to the other types of signatures which in essence only require the signer to be uniquely identified, in other words, something as basic as an email ping could be considered sufficient.

What has happened in the US is that since the law does not require anything stronger than a Simple Signature outside of areas like healthcare and finance where there are either regulatory requirements or business risks that justify a better solution we see only the Simple Signatures in use.

The vendors of these products would probably tell you they don’t do these more enforceable solutions because of you have to choose two of the following Fast, Cheap or Secure.

In the European Union, you have had the opposite problem, the economic incentives of the vendors and the associated regulatory frameworks have sent their market down the path of trying to apply Qualified Signatures to nearly all transactions. This reality has hampered the adoption of electronic signatures limiting their use to the highest value transactions due to the associated onboarding and use time friction this approach typically entails.

I believe this is an example of market failure and that it is possible to build a solution that scales across a businesses enforceability needs. One of the key reasons the market has not yet delivered such a solution is that the economic incentives for the vendors are not well aligned with those of their customers.

Tides are changing in both the US and in the European Union and I believe we will see a convergence of the best of both solutions in the coming years but as of yet, such a solution has not found its way to the market.

Paper in a Digital World

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Paper processes are a normal part of person to person exchanges, and like the written signature, we can be sure their use will not disappear overnight. This means it is even more important that we evolve the relationship between our physical and digital experiences that involve paper so they can work more fluidly.

Sometimes these exchanges begin as a physical interaction and transition to the digital but almost always, it is the digital embodiment of that transaction that is relied upon once the exchange ends. This is because these digital representations make it possible to instantly access the data contained in them and correlate it to other data enabling quicker and better decisions.

This is particularly important to keep in mind when we consider that paper based workflows are, broadly speaking, privacy preserving workflows. Only those people who have physical access to the associated documents have knowledge of their contents. Their physical nature also makes it possible for those who have possession to freely review these documents with others. This is not true of most digital workflows where the records are commonly stored in clear text in some database or cloud storage service.

There is also a long history of effective independent forensic analysis of paper documents and written signatures. While there are certainly many things that can be determined from forensic analysis of a digital document, attributing it to an individual, or detecting that it has been tampered with is often next to impossible.

It is possible to provide these same properties with digital documents and do so with even greater assurances with the intelligent application of cryptographic based signatures and encryption.  Despite this, these approaches are seldom used, the primary reason given by vendors is providing them requires investment in complex key management solutions and often results in sub optimal user experiences.

Those that do offer cryptographic signatures seldom use them to represent the signer’s intent and instead rely on digital facsimiles of the signer’s physical signature. They then notarize that they saw a given ip address, at a given time attach that facsimile of a signature. This technically exceeds the legal minimum requirements in the United States but fails to meet the minimum expectations most other countries mandate for electronic signatures.

Even once you design a solution that achieves all these properties you are not done providing an equivalent digital alternative. These person-to-person exchanges often require both paper and digital artifacts and as a result you will need to be able to link the two together. This is not too dissimilar than how an “original” contract with its ink signature is often treated as the authentic “source of truth”. In these hybrid digital and physical interactions one party may have processes or compliance requirements that require a paper representation (and something that approximates a physical signature) of the interaction. while the others involved may prefer the convenience of the digital representation.

So what are the things you minimally need to look for in a digital signature solution beyond usability if it is to deliver the same or better properties as existing paper based solution?

  • Each signer:
    • cryptographically signs the document;
    • attaches a facsimile of their physical signature to the document.
  • The final document:
    • is cryptographically notarized with metadata about the signing;
    • includes a timestamp and the cryptographic metadata needed to verify the signature long into the future;
    • can be encrypted end-to-end ensuring only the parties associated with of the document can read it;
    • is assigned a unique identifier that is placed plainly in the document so when it printed its digital embodiment can be easily found;
    • includes a log of activities that took place during the signing process;
    • is archived so it can easily be retrieve later in case of a dispute.
  • The document and signature formats used are based on broadly accepted standards so:
    • it will be readable and verifiable far into the future;
    • it can be read and verified in third-party applications;
    • enforcing the agreement does not require participation of the solution provider in case of dispute.
  • A free web based reader is available that:
    • does not require registering to read the document;
    • enables participants to share the documents with others;
    • can validate the signatures without the need for plug-ins or desktop applications;
    • works as well on mobile and tablet as it does on the desktop;
    • can be easily and freely integrated into your own applications.
  • An API that makes it possible to integrate into your own applications the signing of:
    • documents;
    • web forms.

With these bases covered you have something that should be able to withhold the test-of-time just as paper processes have been able to do.

Uniform Electronic Legal Material Act and Digital Signatures

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Apparently one of the reasons states have been reluctant to publish legal material online is that there is a concern over how relying parties can tell if the material is authentic and has not been tampered with.

In an attempt to address this concern a law has been proposed called the Uniform Electronic Legal Material Act (UELMA) the text of which at a high-level states this must be addressed.

“An official publisher of legal material in an electronic record that is designated as official under Section 4 shall authenticate the record. To authenticate an electronic record, the publisher shall provide a method for a user to determine that the record received by the user from the publisher is unaltered from the official record published by the publisher.”

UELMA which was proposed in 2011 has been enacted into law in 12 states (including California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Minnesota, Nevada, North Dakota, Oregon, and Pennsylvania). With that said it looks like it may be yet another an unfunded mandate in that there doesn’t appear to be much activity in the way of publishing data signed data.

As with most US laws UELMA doesn’t specify how one would meet this requirement but the most obvious way would be to publish these documents as PDF files and sign them using PAdES. In many cases (especially legal text) this would be the ideal solution given how easy it is  to both apply and verify signatures thanks to the broad support of the standard.

But why is there such broad support for this standard? It’s simple the EU takes a totally different approach to the problem of specifying what makes a “legal” electronic signature than we do. The US basically doesn’t specify any format or requirements for signatures while the EU specifies 4 formats (each with a different use cases) that are allowable of which PAdES is one.

But why did they choose four formats and not just one? That is easy. A signed PDF may be an great way to make content accessible and verifiable to people it is not a good solution for structured data that would be parsed by machines. In these machine readable cases the Europeans rely on CAdES, XAdES and ASiC which are better signature formats for machine readable data.

Since the US doesn’t specify how one should address this problem a non-profit called US Open Data is advocating a solution they helped develop called Data Seal which is a web application that sits on top of PGP to verify files to be used for all of the above cases.

In my opinion this is a bad approach, here are just a few reasons:

  • PGP is 24 years old and has a wonderful mix of usability and interoperability issues that have not been solved in a meaningful way (though there are many who are trying [like Data Seal] but even many of these supporters now see it a lost cause).
  • Dependency on what is today in-essence a single vendor commercial solution, even if is based on an open standard and open sourced means that if these tiny vendors go out of business there is no practical way for “real users” to verify the authenticity of the documents/data.
  • Legal documents need to be verifiable long into the future and and this approach does not consider the concept of long term signature verification (time-stamping, crypto-periods, etc).
  • Pushing for the adoption of a single machine readable signature format (PGP) across the board at the expense of providing an easy-to-use and verify human readable solution is a short-sighted and bad tradeoff.
  • The world is getting smaller, interoperability is more important today than ever. If were going to adopt a different way of solving the same problem than a large majority of the globe it should provide sufficient material benefits to offset the interoperability and accessibility impacts such a decision caries with it.

I could even argue the that as architected Data Seal actually doesn’t even meet the ULEMA requirements in that ULEMA requires that the solution preserves the data and makes it permanently available but the solution does not provide a way for the signatures themselves to be verified long-term.

Anyway all of this is an interesting side-effect of the US approach to legislature. We try to allow innovation by not overly specifying how the market solves a problem while the EU tends to be overly specific and restrictive which tends to hurt innovation. I am almost always a fan of the US approach as governments move much much slower than the market and tend to create structural barriers to innovation. With that said I think interoperability is a case where standards are needed and when it comes to how governments publish and authenticate documents there should be a standard.

What makes an enforceable electronic signature?

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While this post should not be thought of as legal advice, in the United States there are five key elements that should be considered when answering the question “Is an electronic signature enforceable?”, these include:

  1. Can you prove who signed the document?
  2. Can you prove when and where they signed the document?
  3. Can you prove that they meant to sign the document?
  4. Can you prove they consented to the use of electronic signatures?
  5. Can you prove the document has not been altered since it was signed?

As they say “On the Internet, nobody knows you’re a dog ” — this makes this first question the hardest to answer.

Internet_dog

Does control of the email address “[email protected]” prove who you are? Not really.  This is important because today most electronic signature solutions provide virtually no concept of identity verification beyond proof of control of an email address. This means that in the event of a dispute it will be up to you, and you alone to answer the question of who it is that signed that document.

The only evidence these solutions provide to support a dispute is a log that says something to the effect of “I saw someone with control of [email protected] at 192.168.0.1 typed B-i-l-l  G-a-t-e-s”. The idea being, that in the event of a dispute, you will be able to use this log to prove it was Bill Gates that signed the document. Of course the ability to type the name “Bill Gates” doesn’t prove it was him and honestly the IP address doesn’t help all that much either.

To make matters worse, in most cases these logs are not cryptographically signed. The solution provider just appends an additional page to the document that contains this log. If you ever had to defend the signature, the idea is that you would hash the document and the log and use those values to ask the solution provider to make a statement that the document and the log has not been modified.

This is particularly troublesome when you consider:

  1. As many as 92% of startups fail;
  2. Industry has accepted the question is not “if you will be compromised” but “when”;
  3. Determining what happened decades later can be problematic.

On the surface this does not sound like a big deal; after-all I was raised to honor my word and I wouldn’t do business with someone I thought did not live by that same principle, but unfortunately many are not above cheating their way out of a contract.

The higher-end solution providers do apply cryptographic signatures but with a few exceptions. They only do so as a notarization of this log which helps but is far from holistically answering these key questions. For example even when a cryptographic notarization has been performed an expert would simply need to argue the solution provider could have been compromised when the log or signature was produced.

To address this risk some solution providers go so far as to sign using dedicated keys for each user in addition to notarizing the document. This is by far superior as long as the service provider themselves could not “sign” without the user’s consent. And becomes quite strong if identity verification has also taken place. In this scenario you end up with a set of evidence that actually states, with some reasonable level of assurance, what happened and who was involved.

In the end it is important to remember enforceability of a contract signed with a handshake, ink, or cryptography will always boil down to case-law and the evidence you maintained to support a potential suit. For this reason it is important that you ask yourself how important is it you can enforce the terms of this contract, and to keep adequate evidence so if you ever have to you can do so effectively.

Removing Friction From Online Signatures

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Today there are broadly two different types of signatures done online, electronic signatures and digital signatures. Electronic signatures are a synthetic version of the wet signatures we use in the physical world and digital signatures are a re-envisioning of the idea of signatures that leverage strong cryptography to make an even stronger signature.

But if electronic signatures are the lesser form of the two why do they exist at all? The answer to that question is friction.

In many respects that friction is a self-inflicted wound that is a result of the industry not looking at the problem they are solving holistically. For example today in Adobe Reader it is possible to do both electronic signatures and digital signatures. They have gone out of their way to make these electronic signatures as easy to apply as possible and taken what they likely argued was a principled position and reserved the use of digital signatures for what they considered the “ideal” case where the signer’s private key is on a FIPS 140-2 Level 3 certified key management device.

As a result of this the large majority of “digital signatures” do not actually contain the identity of the signer and instead are simply notarizations of a synthetic wet signature. This is because the user experience available to users for the creation of these synthetic wet signatures is better than what they made available to those doing digital signatures.

I am sure they would argue this is an artifact of the limitations of the technologies but I would argue that is not the case. It is totally possible to apply digital signatures in such a way that it is no more burdensome to a user than a synthetic wet signature.

In prior posts I have discussed the example of key protection; by mandating key compromise can only be mitigated by using FIPS 140-2 Level 3 certified devices they created a structural barrier to vendors from creating a solution that used alternative approaches such as limiting the validity of keys to just a few minutes.

The same holds true of identity, by saying only legal identity can be used in in the credentials used in digital signatures they prevented alternate approaches such as the issuance of a email only credential that is later validated to a higher level or even a pseudo anonymous credential that is later authenticated to a higher level.

Digital signatures can be as usable as the synthetic wet signatures in use today and with the recent changes in the EU with eIDAS we are seeing some of these structural limitations being removed and we can only hope that Adobe follows suit and revises their policies to remove those structural barriers that hold back these alternative approaches.