A digital signature is a mathematical scheme for verifying the authenticity and integrity of digital messages or documents. It uses public key cryptography to create a unique signature for each document. When a sender signs a document with their private key, the signature can be verified by anyone with access to the sender's public key, ensuring that the document has not been altered since it was signed, and confirming the identity of the sender. This technology is commonly employed in securing transactions in cryptocurrencies, signing contracts, and ensuring secure communications.