When Is a Digital Signature Required?
A digital signature is required every time Bitcoin is spent.
Bitcoin stores balances as UTXOs (Unspent Transaction Outputs) on the blockchain.
When you send Bitcoin:
- •Your wallet selects a UTXO that belongs to you
- •The network must verify that you are the rightful owner of that UTXO
- •To prove ownership, your wallet creates a digital signature
- •Without this signature, nodes will reject the transaction