What is a Co-Signer?

A co-signer in cryptocurrency is a feature that allows a user to require additional approval or authorization for certain transactions. This is typically used as a security measure to prevent unauthorized transactions, and can be particularly useful in situations where multiple people need to approve a transaction or where the user wants an additional layer of security.

A co-signer is usually implemented as a multi-signature or multi-factor authentication system, where two or more people are required to approve a transaction before it can be executed. In order to set up a co-signer, the user typically needs to create a shared wallet or account with the co-signer or co-signers, and set up rules for how transactions will be authorized.

For example, let's say that a business wants to implement a co-signer system for their cryptocurrency transactions. They might set up a shared wallet with two co-signers - the CEO and the CFO. They could then set up rules so that any transactions above a certain amount require approval from both the CEO and the CFO before they can be executed.

In this case, if the business receives a large payment in cryptocurrency, the CEO and CFO would both need to approve the transaction before it could be completed. This would provide an additional layer of security to ensure that the transaction is legitimate and authorized, and could help prevent fraud or other unauthorized transactions.

Co-signers can be particularly useful in situations where multiple people need to approve transactions, or where there is a risk of fraud or theft. However, they can also add complexity to the transaction process and may require additional time and resources to set up and manage. As with any security measure, it is important to carefully evaluate the risks and benefits of co-signers before implementing them in a cryptocurrency system.

Simplified Example

In cryptocurrency, a co-signer is similar to having a co-signer on a loan. When you take out a loan, the lender may require you to have a co-signer who agrees to pay the loan if you are unable to make payments. In the world of cryptocurrency, a co-signer is someone who agrees to help protect your funds by acting as a backup when you are making transactions.

For example, if you are making a large transaction or storing a significant amount of cryptocurrency in a wallet, you may want to have a co-signer to help ensure the security of your funds. The co-signer would have to approve any transactions before they are executed, which can help prevent fraud or theft.

Co-signers are often used in multi-signature wallets, which require more than one person to sign off on transactions. This can help increase the security of the wallet, since multiple people must agree before any funds can be moved. Co-signers can be trusted friends, family members, or even third-party services that offer co-signing services.

History of the Term Co-Signer

The term "co-signer" has its origins in traditional finance, specifically within lending practices. It refers to an individual who joins another person in signing a loan or financial agreement, assuming shared responsibility for repayment.

Dating back through centuries of financial transactions, the co-signer conceptually emerged to mitigate risk for lenders by having multiple parties liable for the debt. Over time, this practice gained prominence, particularly in loan applications where one party might have insufficient creditworthiness or financial history, necessitating a co-signer to bolster the application's viability.

In the digital age, the term has also extended to certain cryptocurrency contexts, where multi-signature wallets or transactions might require multiple digital signatures to authorize or execute specific actions, enhancing security and trust within blockchain-based transactions.


Electrum: It's a software wallet that supports multiple platforms and allows users to set up a 2-of-3 multisignature wallet, meaning that any two out of three individuals must confirm a transaction before it can be completed.

BitGo: It's a web-based wallet that supports multiple cryptocurrencies and allows for multi signature transactions with up to 8 co-signers.

Copay: It's a mobile and desktop wallet that supports multiple cryptocurrencies, and allows for shared wallets with multisignature support and multiple co-signers.

  • Multi-Signature: A multi-signature (also known as a multi-sig) transaction is a type of digital signature that requires more than one signature to be valid.

  • Authentication: Authentication is the process of verifying the identity of a user or device before granting access to a system or resource.