Mastering Blockchain - Second Edition

Hierarchical Deterministic wallets

Defined in BIP32 and BIP44, Hierarchical Deterministic (HD) wallets store keys in a tree structure derived from a seed. The seed generates the parent key (master key), which is used to generate child keys and, subsequently, grandchild keys. Key generation in HD wallets does not generate keys directly; instead, it produces some information (private key generation information) that can be used to generate a sequence of private keys. The complete hierarchy of private keys in an HD wallet is easily recoverable if the master private key is known. It is because of this property that HD wallets are very easy to maintain and are highly portable. There are many free and commercially available HD wallets available. ...