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Output Descriptors

At first you would generate a private key for each wallet you owned. It's already difficult to store 1 private key safely so a big UX improvement came about with BIP32.

HD wallets which can be shared partially or entirely with different systems, each with or without the ability to spend coins1

Why Output Descriptors?

  • [focus on xpub output descriptors, e.g. from hardware wallets]
  • Introduction to bip32
  • BIP44 derivation paths
  • BIP49 derivation paths
  • BIP84 derivation paths
  • Obtaining an xpub

Diving in

Part 1: Derivation Paths

m / purpose' / coin_type' / account' / change / index
  • BIP 44: m/44'/0'/0' (for 1addresses)
  • BIP 49: m/49'/0'/0' (for 3addresses)
  • BIP 84: m/84'/0'/0' (for bc1addresses)

You can derive up to 4294967296 children from a single extended key. The first half are for normal children, and the second half are for hardened children.

  • 0 - Normal Child (index 0)
  • 0' - Hardened Child (index / starts at 2147483648)

Part X: Obtaining an xpub

Risks of Sharing

Do NOT share an xprv.

Sharing an xpub...

If, and only if, the recipient also obtains a single private key from your wallet, the recipient can obtain all your private keys and steal your funds, just as if they had your xprv key.2

Footnotes

  1. https://en.bitcoin.it/wiki/BIP_0032 "BIP32" ↩

  2. https://en.bitcoin.it/wiki/Deterministic_wallet_tools#Risks_of_Sharing_an_Extended_Public_Key_.28xpub.29 ↩