Bitcoin wallet master key

WHY I’M DESIGNING A BIP32 WALLET- Hierarchical Deterministic (HD) Bitcoin Wallets offer several advantages over traditional Bitcoin wallets.

One of the problems with traditional Bitcoin wallets is that the wallet may hold a whole bunch of keypairs, each with Bitcoins attached to them. When you want to back up your wallet, you backup all of the current keys that you control in that wallet. However, if you later generate a new key, you need to make a brand new back up of your wallet. In fact, you need to back up your wallet every time you generate a new key.

Easy backups

HD wallets allow you to create a huge number of Bitcoin keys (keypairs) that all derive from a parent master key. This means that if you control the master key, you can generate the entire tree of children keys. So instead of needing to make repeated backups of your wallet, you can create a single backup when you create the wallet, and from then on to the end of time, you will never need to make a new backup, because you can just recreate ALL of the child keys from your master key.

Safely store your private keys offline

Additionally, HD wallets introduce cool new features to wallets, like being able to derive the entire tree of public keys from a parent public key without needing ANY private keys. For instance, let’s say you have your master private key backed up on a paper wallet and stored offline in a safe somewhere, but you have the master public key available. Using just this public key, you can generate an entire tree of receive-only child public keys.

For instance, let’s say you wanted to open a Bitcoin ecommerce website. With HD wallets, you can keep your master private key offline, and only put your public key onto the public webserver. Your website can then use that key to generate a receiving address for each and every product on your site, a unique address for each one of your customers, or even a key unique to each customer/product combo. (The uses are left up to your imagination.) And since the private key is stored offline, nobody will ever be able to hack your site and steal your Bitcoins.