- A deterministic wallet is far superior to non-deterministic wallets because it is much smaller and with only one backup you have the whole wallet. With Non-deterministic wallets you have to keep a ongoing recent backup that can be large and cumbersome to maintain.
- Type-2 deterministic wallets [Privatekey(type,n) = Master_private_key + H(n|S|type)] allow you to store the master key separately from the seed so that you can still generate new public addresses without it. This allows a business front to expose a public address to receive bitcoin without the risk of loosing all the funds in their wallet. Type-1 deterministic wallets [Privatekey(type,n) = H(n|S|type)] do not use a master key in its calculation.
- Type-1 for the receiver: i - 1 to i - R where i = 1000
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A Deterministic Wallet is a wallet which you can backup once and it stays backed up forever because all future addresses are determined in advance. This wallet is way easier to backup compared to a non-deterministic wallet as it only needs one seed phrase.
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Type-2 wallets can separately secure the master private key and still generate new addresses following a mathematical function
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Anonymity set for type-2 wallets is larger as the user can generate a new address for each new transaction he/she wants to do
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A deterministic wallet is smaller and requires just one backup, compared to a non-deterministic wallet, which requires maintaining updated backups
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Type-2 deterministic wallets separate the master key from the seed phrase, which is more secure, and allows us to generate new public keys without using the private key, so if a wallet is compromised, a new one(s) can be generated without affecting the underlying funds.
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The anonymity set for a receiver using a deterministic wallet is basically infinite.
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- Only have to backup once and in a small size, and backup lasts forever.
- The possibility to separately store a Master Private Key.
- 1: only 1 receiver.
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- What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
- You can backup once and it stays backed up forever.
- What advantage does a Type-2 wallet have over Type-1?
- You can separately secure the Master_private_key, but still generate new addresses
- What is the anonymity set for a receiver using a Deterministic Wallet?
- You can use a new address for every TX.
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ya it was kinda hard to see; thanks for the update.
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What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
you only need to backup deterministic wallet once forever because all that already has future addresses, and can be stripped down to very small size to backup on paper (e.g. QR code) -
What advantage does a Type-2 wallet have over Type-1?
separately secure the Master_private_key, the parent private key, but still can generate new addresses -
What is the anonymity set for a receiver using a Deterministic Wallet?
the address can be changed for every single transaction
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A Deterministic Wallet lessens user mistakes. With deterministic wallets, there is only a single private key to keep track of/keep safe, rather than many key pairs.
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With Type 2, there is a Master Public Key which can generate public keys. This process does not involve the Private Key, which remains segregated, making Type 2 more secure. The Master Public Key can live on an e-commerce server and even if hacked, the Private Key is still secure. In contrast, in Type 1, the Private Key is directly used to generate all public keys, and they are generated in large chunks of 1000 at a time. These addresses must then be stored, also making Type 1 require more storage.
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Since a fresh Deterministic Wallet address is not linked to any identity, it could be literally anyone, so I would say the anonymity set would be all current bitcoin users.
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- What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs？
it is a wallet that you can backup once and it stays backup forever as future addresses are determined in advance. It can also be stripped down to a small size so it can be backed up on paper as well. - What advantage does a Type-2 wallet have over Type-1?
the advantage of the type-2 is tat you can separately secure the master private key. - What is the anonymity set for a receiver using a Deterministic Wallet?
public addresses are changable after every transaction.
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The advantage is that the Deterministic wallet generate all future addresses in advanced and it will stay backed up forever, also you can minimize the back up to a paper size wallet at any time.
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The advantage of type 2 vs type 1, would be that type 2 offers the extra advantage of ECC configuration, which gives a secret point to your public and private key, making it “not feasible” to find that secret point to determine your keys.
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If I understand correctly, if the address you use to make a transaction is used over and over without changing it, it could be track all the way to you, thus reveal your identity and private keys. A Deterministic wallet would prevent all this from happening.
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- you can back it up and it stays backed up forever because all future addresses are determined in advance
2.type 2 wallet separately secures both a master private key and a public key
- Public addresses are changeable after every transaction
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With a deterministic wallet you generate one master seed keypair from where multiple other keypairs (addresses) are generated/ derived. That means multiple addresse are generated when you use a deterministic wallet but you only need to remember one keypair to have access to all the other addresses. Without a deterministic wallet in order to create more anonymity you have to create a lot of random keypairs by yourself. Imagine you have lots of addresses (different keypairs) which gets difficult to backup and store over time because the number is growing and growing.
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In type-1 wallets all private keys come from on single secret seed. That means one random number is put into a “formula” that generates new keys which are all based on the starting one. Storing becomes now easy because you only have to remember one seed phrase where you can recover all derived private keys out of. The different between type 1 and type 2 is that receiving funds with a type 1 wallet requires having access to the private keys (that could spend them) which could clearly be a security issue.This is why in type 2 wallet a master key was introduced which is able to generate new addresses (without giving out private keys) without ever being able to spend those funds.
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The anonymity set for a receiver are all unknown Bitcoin addresss, when I understand it correctly.
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Q1: From what I understood a deterministic wallet predetermines all the possible addresses allowing you to back it up once and not have to worry about remembering the keys.
Q2: Type 2 wallets need less storage than type 1 and can also regenerate the addresses with a math function. They can also separately secure the master key.
Q3: All unknown addresses.
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- It’s a wallet which you can backup once and it stays backed up forever because all future addresses are determined in advance.
- The advantage of the type-2 is that you can separately secure the Master_private_key, but still generate new addresses with
Publickey(type,n) = Master_public_key + H(n|S|type)*point - After each transaction, public addresses can be changed
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1 - What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
|---------------------------------------------------------------------------------------|
| Wallet | Ease of Backup | Paper Backup | Addresses |
|========================|==============================================================|
|Deterministic Wallet |-backup once, easy | True |-future addresses |
| |-backup lasts forever |- paper (QR code) |pre-calculated |
|--------------------------------------------------------------------|------------------|
|Non-Deterministic Wallet|-only safe if backup | False |-randomly |
| |of least every 100 get|-hard to backup on |precomputed |
| |addresses or sends, |paper over time as |in advanced |
| |difficult |addresses get large | |
|---------------------------------------------------------------------------------------|
2 - What advantage does a Type-2 wallet have over Type-1?
In hierarchial deterministic Type-2 wallets have a single Master Private Key/Master Pubilc Key pair. A random index is applied to the Master Pubilc Key by the client/customer/sender to generate a new indexed Public Key. This is the address that will receive a transaction. When the owner(system or wallet) of the Master Private Key will receive this random index(orderID), it can generate a matching Private Key which is used to verify the signature of a transaction on the blockchain.
In hierarchial deterministic Type-1 wallets the random index is applied to the single Private Key. This random index/Private Key pair is used to create the Public Key. Outside entities do not play a role in the index generation.
3 - What is the anonymity set for a receiver using a Deterministic Wallet?
The anonymity set for a receiver using a Deterministic Wallet is all of the users that sent bitcoin to bitLaundry type service from the receivers block index -1 to receivers block index - Max random delay inclusive.
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- The advantage is once you set the seed phrase it will be there forever for back up minimizing the chance of loosing private keys by creating multiples.
- The Type-2 wallet uses ecliptic curve computational to enhance security protocol and safeguard private key.
- Maybe more than 1000 pre-determined public addresses that will be used to conceal the master key.
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- What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
You back it up and stays backed up forever. - What advantage does a Type-2 wallet have over Type-1?
You separetly secure it with n offset. - What is the anonymity set for a receiver using a Deterministic Wallet?
Public addresses are changable after every transaction.
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Check out #3 again. Scroll up to find answer
I rewrite the 3rd answer. Thanks Grant for the correction.
3. Anyone can be the recipient on the blockchain. The Anonymity Set is the set of all unknown addresses.
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The advantages of a Deterministic Wallet are that it only needs to be back-up once and then this will remain backed-up in perpetuity. It can also be reduced to its bare minimum and still be backed up on paper or using a QR code.
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A Type-2 wallet has the advantage of being able to secure the Privatekey separately from the Publickey but still generate new addresses using the Publickey
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The anonymity set for a receiver using a Deterministic Wallet is 1000.
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