What Is a Co-Signer?

Co-signers are a concept closely related to multi-signature cryptocurrency wallets.

Most commonly, cryptocurrency wallets are designed for single-key access — that is, in order to manage the funds the owner needs to use their one private key. While simple, convenient and secure enough under most circumstances, these wallets offer insufficient protection in some contexts.

Multi-signature wallets are a more secure variant of a cryptocurrency wallet: they require multiple people or organizations to provide their own unique keys before allowing access to the stored funds. The signature requirements can be configured in various ways: for example, 2-of-3, one of the common ones, needs two out of a total of three keys to unlock funds. The people using their private keys, in this context, are co-signers.

Co-signing the release of cryptocurrency funds may be required in different scenarios. One of the most popular ones is simple security enhancement of a personal wallet: by using a multi-signature wallet and storing the signatures needed to open it on several different devices, a single user can protect themselves from the loss or theft of one or more of the keys.

Another important use case is relevant to businesses: storing the majority of a company’s cryptocurrency funds on a single-signature wallet subjects them to excessive security and organizational risks. By requiring the keys of a majority of multiple co-signers (for example, board members) a multi-sig wallet protects its contents from misuse or outright theft by a single employee.