Dictionary.net

(CA or "Trusted Third Party") An entity(typically a company) that issues digital certificates toother entities (organisations or individuals) to allow them toprove their identity to others. A Certificate Authority mightbe an external company such as VeriSign that offers digitalcertificate services or they might be an internal organisationsuch as a corporate MIS department. The CertificateAuthority's chief function is to verify the identity ofentities and issue digital certificates attesting to thatidentity.The process uses public key cryptography to create a"network of trust". If I want to prove my identity to you, Iask a CA (who you trust to have verified my identity) toencrypt a hash of my signed key with their private key.Then you can use the CA's public key to decrypt the hash andcompare it with a hash you calculate yourself. Hashes areused to decrease the amount of data that needs to betransmitted. The hash function must be cryptographicallystrong, e.g. MD5. (http://home.netscape.com/comprod/server_central/support/faq/certificate_faq.html#11).