#### BIP32/BIP39/BIP44 Standards Bitcoin Improvement Proposals defining standards for hierarchical deterministic wallets (BIP32), mnemonic phrases for generating seeds (BIP39), and multi-account hierarchy structure within HD wallets (BIP44). These standards ensure compatibility between different wallet implementations and improve user experience when managing cryptocurrencies. #### BIP32 A Bitcoin Improvement Proposal that defines a hierarchical deterministic (HD) wallet structure. It allows for the creation of a master seed that can be used to generate an unlimited number of private keys and addresses, without the need for multiple backups or manual key management. BIP32 is limited to a *single cryptocurrency per wallet*; it is primarily used in Bitcoin and some other cryptocurrencies. #### Pre-BIP39 Before BIP39 (Bitcoin Improvement Proposal 39), there was no standard for how to generate and store mnemonic phrases (a.k.a. seed phrases) that could be used to recover a wallet's private keys. Different wallets used different methods, which made it harder for users to switch between wallets or recover their funds if they lost access to their original wallet. >[!caution] This section requires some additional context or verification. The pre-BIP39 key adds an extra step in the derivation process, making it more secure. It is derived from the original BIP39 seed phrase but undergoes further encryption and fragmentation processes. With proper implementations of pre-BIP39 keys, someone with your BIP39 seed phrase would not be able to directly derive your private key and access your funds. An encrypted fragment of a pre-BIP39 version of a private key is useless on its own, requiring cryptographic reassembly with other fragments before it can be used again. #### BIP39 BIP39 is a standard for generating and storing mnemonic phrases that can be used with any compatible wallet software. It specifies a list of 2048 words from which the phrase is randomly generated, as well as an algorithm for converting the phrase into a binary seed that can be used to derive private keys. #### BIP44 A Bitcoin Improvement Proposal that defines a multi-account hierarchy for deterministic wallets. It extends the BIP32 protocol by adding a new level of derivation paths for different accounts, each with its own set of private keys and addresses. This allows users to manage multiple accounts and cryptocurrencies with a single seed, making it easier to keep track of their funds. BIP44 is an extension of BIP32 that allows for the creation of multiple accounts for different cryptocurrencies. It defines a multi-account hierarchy for deterministic wallets, with each account having its own set of private keys and addresses. This makes it easier for users to manage multiple cryptocurrencies with a single seed. while BIP44 is used in many wallets that support multiple cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and others. #### BIP-0174 A Bitcoin Improvement Proposal that defines a new transaction serialization format called "witness version 1". This format is used to enable the [[Bitcoin Proposals#BIP 141|Segregated Witness]] soft fork, which separates transaction signatures from the transaction data, allowing for more transactions to fit in a block. ![[Bitcoin Proposals#BIP 141]] #### BIP-370 A Bitcoin Improvement Proposal that introduces a new opcode called OP_CHECKOUTPUTSHASHVERIFY (OP_COH), which allows for the verification of a transaction output's hash. This can be used to create more complex smart contracts on the Bitcoin network. #### BSMS "Bitcoin Signed Message Standard" and is a standard for signing messages with Bitcoin private keys. This can be used for proving ownership of a Bitcoin address or for signing messages in a decentralized application. #### Partially Signed Bitcoin Transactions (PSBTs) Partially signed Bitcoin transactions, also known as PSBTs, were introduced in 2017 with the release of Bitcoin Core version 0.16.0. PSBTs were implemented to facilitate the creation and signing of multi-signature or complex transaction workflows involving multiple parties. The introduction of PSBTs addressed a limitation in traditional Bitcoin transactions where all inputs needed to be fully signed by a single party before broadcasting the transaction to the network. This posed challenges for scenarios such as multi-signature wallets or collaborative spending where multiple participants need to sign off on a transaction. PSBT creates partially signed transaction data structures that can be passed between different hardware or software wallets without revealing sensitive information like private keys. This allows multiple parties to collaborate on creating and signing complex transactions without needing direct access to each other's wallets. PSBT is specific to Bitcoin's UTXO model and focuses on enabling offline coordination among multiple signers for constructing complex transactions.