How Does a Digital Signature Rely on a Cryptographic Hash Function?

A digital signature process begins by hashing the message or document (e.g. a trade instruction) to create a fixed-size digest. The sender then encrypts this hash digest using their private key.

The recipient can verify the signature by decrypting the hash with the sender's public key and independently hashing the received message. If the two hashes match, it proves the message's authenticity and integrity.

The hash function ensures the signature is compact and unique to the document.