In this quote, Satoshi is explaining the basic concept of a digital currency, specifically how ownership is transferred and verified.

He defines an electronic coin as a series of digital signatures, where each signature represents a transfer of ownership. When a coin is transferred, the current owner creates a digital signature that includes two key pieces of information:

1. A hash of the previous transaction, which links the current transfer to the previous one, creating a chain of transactions.

2. The public key of the next owner, which identifies the recipient of the coin.

By adding these two pieces of information to the end of the coin, the current owner is effectively transferring ownership to the next owner. The payee (the recipient) can then verify the chain of ownership by checking the digital signatures.

In essence, Satoshi is describing a decentralized, cryptographic method for transferring value, where the legitimacy of each transfer is verified through a chain of digital signatures, rather than relying on a central authority. This concept is the foundation of blockchain technology and cryptocurrency.