The Internet is a large common space, accessible to everyone around the world. As in any public space, you should take appropriate precautions to protect yourself against fraudulent people and processes.
Authentication is the process of determining whether someone or something is, in fact, who or what it is declared to be. In private and public computer networks (including the Internet), authentication is commonly done through the use of logon passwords. Knowledge of the password is assumed to guarantee that the user is authentic. Each user registers initially (or is registered by someone else), using an assigned or self-declared password. On each subsequent use, the user must know and use the previously declared password. The weakness in this system for transactions that are significant (such as the exchange of money) is that passwords can often be stolen, accidentally revealed, or forgotten.
A digital signature or digital signature scheme is a mathematical scheme for demonstrating the authenticity of a digital message or document. A valid digital signature gives a recipient reason to believe that the message was created by a known sender such that they cannot deny sending it and that the message was not altered in transit. Digital signatures are commonly used for software distribution, financial transactions, and in other cases where it is important to detect forgery or tampering.
A cookie is a small amount of data generated by a website and saved by your web browser. Its purpose is to remember information about you, similar to a preference file created by a software application. While cookies serve many functions, their most common purpose is to store login information for a specific site. Some sites will save both your username and password in a cookie, while others will only save your username. Whenever you check a box that says, "Remember me on this computer," the website will...