## BIP-85 vs Hierarchically Deterministic wallets

### Question

Please summarize the above BIP-85 for me. Whats the difference between this and the xpub based account derivation paths? How is address reuse with xpub based paths related to BIP-85 key derivation?

### Hierarchical Deterministic (HD) Wallets (e.g., BIP32/BIP44/BIP49/BIP84)

- Single Entropy Source: All keys (xpub/xpriv) derive from one root seed (e.g., a BIP39 mnemonic).

- Hierarchical Structure: Keys are organized into accounts/chains (e.g., m/44'/0'/0' for Bitcoin legacy, m/84'/0'/0' for native SegWit).

- Security Risk: If the root seed is compromised, all derived keys (past, present, and future) are exposed.

- Address Reuse: Reusing the same derivation path (e.g., m/84'/0'/0'/0/0) generates the same address repeatedly.

### BIP-85 "Master Seed for Seeds"

- Generates Independent Entropy: From a single root seed, BIP-85 derives new, cryptographically isolated entropy for:

- New BIP39 mnemonics (12/24 words).

- WIF keys (e.g., for Bitcoin Core wallets).

- RSA/DICE keys, passwords, etc.

- Security Isolation: derived entropy is hardened via HMAC-SHA512. Compromising one derived seed does expose others or the root seed.

- Use Case: Manage multiple wallets (e.g., Bitcoin, Monero, GPG keys) with separate seeds from a single backup. For example:

- m/83696968'/39'/0'/12'/0' → 12-word BIP39 mnemonic (isolated from root).

- m/83696968'/2'/0' → WIF key for Bitcoin Core.

### Key Differences

| Feature | HD Wallets (BIP32/44) | BIP-85 |

|------------------------|-------------------------------------------|------------------------------------------|

| Root Dependency | All keys depend on the root entropy. | Generates new entropy per application. |

| Security Scope | Single point of failure (root seed). | Compartmentalized; breaches are isolated. |

| Output | Public/private keys (same entropy chain). | New seeds, mnemonics, or entropy. |

| Backup Strategy | One for all keys. | One backup, but derived act like separate backups. |

### Why BIP-85 Enhances Security

- No Shared Entropy: Unlike HD wallets, BIP-85-derived seeds are not mathematically linked to each other or the root. They’re hardened via HMAC-SHA512 to prevent reverse-engineering.

- Mitigates Address Reuse: By independent seeds, you avoid reusing the same address pool across wallets (e.g., using one seed for Lightning Network and another for cold storage).

### Example Workflow

1. Root Seed: Backup abandon art ... (BIP39 mnemonic).

2. ive via BIP-85:

- m/83696968'/39'/0'/24'/0' → 24-word mnemonic for a hardware wallet.

- m/83696968'/707764'/32'/0' → Base64 password for an exchange.

3. Security: If the exchange password is breached, your hardware wallet’s mnemonic remains secure.

In short, BIP-85 lets you compartmentalize security while maintaining a single backup, whereas HD wallets trade convenience for shared risk.

```mermaid

flowchart TD

subgraph "HD Wallets (BIP32/44/49/84)"

RootSeed["Single Root Seed (Entropy)"] --> BIP32RootKey

BIP32RootKey --> Account1["Account 1 (e.g., m/44'/0'/0')"]

BIP32RootKey --> Account2["Account 2 (e.g., m/84'/0'/1')"]

Account1 --> Address1A["Address A (m/44'/0'/0'/0/0)"]

Account1 --> Address1B["Address B (m/44'/0'/0'/0/1)"]

Account2 --> Address2A["Address X (m/84'/0'/1'/0/0)"]

Account2 --> Address2B["Address Y (m/84'/0'/1'/0/1)"]

style RootSeed fill:#f9f,stroke:#333

end

subgraph "BIP-85 Wallet"

BIP85RootKey["Master Root Key"] --> HMAC["HMAC-SHA512 (bip-entropy-from-k)"]

HMAC --> |"Truncated Entropy"| App1["BIP39 Mnemonic 1 (m/83696968'/39'/...)"]

HMAC --> |"Truncated Entropy"| App2["WIF Key (m/83696968'/2'/...)"]

HMAC --> |"Truncated Entropy"| App3["RSA Key (m/83696968'/828365'/...)"]

App1 --> WalletA["Bitcoin Wallet"]

App2 --> WalletB["Bitcoin Core Wallet"]

App3 --> WalletC["GPG Key"]

style BIP85RootKey fill:#f9f,stroke:#333

end

RootSeed -.-> |"Same Initial Seed"| BIP85RootKey

```