Pennsylvania has begun a program that will allow the notarization of documents using digital signatures. http://www.nationalnotary.org/news/index.cfm?Text=newsNotary&newsID=851
The program is called the Electronic Notary Seal (ENS) and relies on public key cryptography to perform the notarization function.
This program is interesting for two reasons:
First, this is a profound step in the acceptance of a digital signature as a legally binding. If I’m not mistaken, the validity of digital signatures in lieu of actual signatures, or notarization, has not been legally challenged.
Second, the use of legally binding digital signatures provides a path for increased transaction authentication.
Notaries currently perform the function of certifying copies, or of witnessing the signing of a document. Digital signatures can provide both functions. When a copy is made, if the digital signatures of the two documents match, they are identical. If an individual uses his private key to sign a document, it can be independently verified that he, and only he, signed the document.
Employing public key cryptography in the realm of notarization has the potential of decreasing the time and hassle of obtaining notary services without loss of security.
The logical extension of this kind of system is the general acceptance of individual digital signatures as a means of authenticating a digital item, without the need for a notary.
A secure Public Key Infrastructure (PKI) is required for any public key encryption scheme to work. The PKI must ensure that digital signature keys are distributed securely.
It is not clear how the ENS system tackles the PKI issue. It is also an open problem for how to deploy a PKI sufficient for the general public. Though vendors such as Verisign exist for this purpose, I don’t imagine the average Joe running out for a Certificate.
As digital signature systems become more widely used, fine grained transaction processing becomes a possibility. If users have easy access to a device that has their private key, each transaction the user initiates can be signed. Unless a thief obtains both private key and transactor (credit card, for example), unauthenticated transactions will become a thing of the past.
The ENS system is a good first step, and I’ll be excited to see where it leads.