Articles on: Security

What is the Derivation Path?

The derivation path is one of those entirely technical concepts that self-custodial wallet users, such as those of Defiant, need to deal with nowadays. It's not necessary to have a complete understanding of it, but eventually, it may be necessary to know what it is and how it impacts the importation of our recovery phrase.

Derivation path

When importing/deriving a wallet from the 12/24 words of the recovery phrase, a set of computer instructions is needed to define the way in which the key pair —private key/public key— that makes up any wallet will be obtained. These instructions make up the derivation path, which typically looks like m/44'/60'/0'/0'/0.

Different paths, different addresses

Even if the same recovery phrase is used, using two different paths implies accessing two different wallets, accounts, or addresses. This means that if we import the same 12 words once with the path m/44'/60'/0'/0'/0, and once with m/44'/61'/0'/0'/0, for example, we will obtain different addresses for each case. Therefore, it's vital to remember which path we're using to derive the recovery phrase. However, the derivation paths used by most interfaces are only a few.

Since the derivation path gathers the instructions to obtain the private key from the recovery phrase —from which the public key is derived, and then the wallet address is obtained—, all this technical jargon can be avoided by safeguarding and importing a wallet directly with the private key, not the recovery phrase. In this case, it should be remembered that for each address managed in a wallet, there must be a private key.

Perhaps an example of the same recovery phrase derived with two different paths will serve to illustrate its role in importing a wallet:

Recovery phraswDerivation pathPrivate key / Address
tree tree tree tree tree tree tree tree tree tree tree treem/44'/60'/0'/0'/04f1646c9b737e6795f1d69840fce95de5121a1067383e0b1b44521f626613812 / 0xff28dA099F8932e0282cD9229DB72643DbE97e29
tree tree tree tree tree tree tree tree tree tree tree treem/44'/61'/0'/0'/01328957079e599c381f67ccef4e4b632b74961857a3a1c0520260e7a22f86a78 / 0x0C7087CaDe5D3280eDe858D3F604636215e93010

The above doesn't have the same practical application on the Bitcoin network, where many addresses can be derived and managed as if it were a single account, in what is known as Hierarchical Deterministic (HD) wallets. To learn more about this topic and reinforce the concept of "derivation path," you can watch the following video by Andreas Antonopoulos discussing these topics:

Updated on: 28/03/2023

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