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Cryptogambling / BIP-85: A Standard for Deterministic Crypto Wallets – Improving Security

BIP-85: A Standard for Deterministic Crypto Wallets – Improving Security

Publish Date: 03/05/2023

Bitcoin Improvement Proposal 85, or BIP-85, is a proposed standard that provides a method for creating deterministic crypto wallets. This standard is designed to improve the security of wallets and make it easier for users to manage their seed phrases. In this article, we will explore what BIP-85 is, why it is important, and its potential use cases. We will also provide examples of crypto wallets that support BIP-85 and explain how they implement the standard.

What is BIP-85?

BIP-85 is a proposed standard for the creation of deterministic crypto wallets. Deterministic wallets are a type of crypto wallet that uses a master seed to derive all seed phrases, rather than generating them randomly. This allows users to back up one seed phrase and recover all other seed phrases from that initial one if their device is lost or stolen. This allows for the creation of an unlimited number of addresses just with one backed-up seed phrase.

Why is BIP-85 important?

Improved security

BIP-85 is important for several reasons. First, it improves the security of a wallet by providing a standardized method for creating deterministic wallets. This reduces the likelihood of key loss or theft, as users can easily recover several wallets using one seed phrase.

Easy management

Second, BIP-85 makes it easier for users to manage their wallets. By using a deterministic wallet, users can create an unlimited number of addresses without having to worry about managing individual seed phrases. This makes it easier for users to track their Bitcoin transactions and balances.

Potential use cases for BIP-85

  1. Custodial services: Custodial services are responsible for holding and managing funds on behalf of their clients. By using BIP-85, custodial services can create deterministic wallets for each client and easily manage their funds. This reduces the risk of key loss or theft and improves the overall security of the custodial service.
  1. Gaming and gambling: Gaming and gambling platforms often require users to deposit Bitcoin into their accounts. By using BIP-85, these platforms can create deterministic wallets for each user and allow them to easily deposit and withdraw Bitcoin. This reduces the risk of key loss or theft and ensures that each user’s funds are secure.
  1. Financial management: Companies or organizations often need to manage funds across various departments or divisions. By using BIP-85, a company can create separate deterministic wallets for each department or division, with a unique seed phrase and passphrase for each. This ensures that each department can manage its funds independently without having access to the main account. If one department’s finances are compromised, the rest of the organization’s funds remain secure. This provides an added layer of security and control over the financial management of the organization.

Wallets that support BIP 85

Several crypto wallets support BIP-85, including:

AirGap

AirGap is a multi-coin wallet that offers cold storage by turning a mobile phone into a cold wallet. The wallet provides a secure and easy-to-use interface for managing digital assets while keeping seed phrases offline. AirGap also supports BIP-85, allowing users to create and manage multiple wallets with a single master seed.

When using AirGap with BIP-85, users can create multiple wallets for different purposes, such as trading, investment, and long-term holding. Each wallet can have its unique passphrase, which provides an additional layer of security and makes it easy to manage multiple wallets from a single device. AirGap is compatible with iOS and Android devices and supports various cryptocurrencies.

Overall, AirGap provides a highly secure and user-friendly wallet solution for those looking to manage multiple wallets using BIP-85. The wallet’s cold storage solutions, coupled with its support for BIP-85, make it a highly secure option for managing digital assets.

Learn about AirGap BIP-85 implementation here

ColdCard

Source: ColdCard

ColdCard is a hardware wallet designed for the secure storage of Bitcoin.

The wallet provides offline storage solutions, making it an ideal choice for users who prioritize security. Coldcard also supports BIP-85, which allows users to create and manage multiple wallets using a single master seed phrase and unique passphrase.

When using Coldcard with BIP-85, users can create multiple wallets for various purposes, such as trading, long-term holding, and investment.

Coldcard also supports an open-source wallet management software called “Coldcard Wallet,” which allows users to interact with their wallets securely. The software includes a range of features, including address labeling, transaction monitoring, and multisig support.

Overall, Coldcard’s support for BIP-85 provides users with an easy and secure way to manage multiple wallets using a single device. The wallet’s offline storage solutions, coupled with its support for BIP-85, make it an excellent choice for users who prioritize security when managing their digital assets.

Learn about ColdCard BIP-85 implementation here

Final Note

Security is something you should take as a priority, especially in a field like cryptocurrency scammers are trying to prey on innocent ones. If you are a fan of β€œself-custody”, it is very important to use a wallet that has the BIP-85 as a feature.

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