Understanding the Bitcoin White Paper's Notion of "Signing" and "Verifying" Consider from the Bitcoin white paper a graphic that includes dotted arrows, labeled "sign" and "verify":


  


What does it mean to "sign" and "verify", as outlined in this paper? Are the terms "private key" and "public key" used in the same way that they are in the RSA encryption algorithm?
Yes. It means "sign" and "verify" exactly as in a public key system such as RSA. Bitcoin doesn't introduce new cryptographic primitives or notions; it simply combines existing ones in a novel way. So you would simply use a public key system such as RSA to implement those operations in Bitcoin. The actual algorithm used is ECDSA, but this predates Bitcoin by quite a while. Arguably the "break-through" in Bitcoin is a clever mix of existing cryptographic techniques and aligning incentives.

Another clever aspect is that Bitcoin solves a different problem than what cryptographers traditionally viewed as "digital cash". That is, Bitcoin doesn't meet all the desiderata that one would hope "digital cash" would have, but clearly it's a pretty effective solution to the colloquial meaning of "digital cash".