Deterministic Wallets - Reading Assignment

Privacy Coins - Ultimate Course
#184

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    Deterministic Wallet’s can be be backed up permanently, are very small and easy to carry on paper.

  2. What advantage does a Type-2 wallet have over Type-1?
    The private key can be secured but keep generating public keys.

  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)
    Depends on how many the system generates, in the original post 1000 addresses into the future was fielded.

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#185

Technically there is no connection between the master key and derived keys so the anonymity set is basically equal to all unknown addresses in the blockchain. :slight_smile:

#186

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    It’s a wallet which you can backup once and it stays backed up forever because all future addresses are determined in advance. It can also be stripped down to a very small size which could be easily backed up on paper

  2. What advantage does a Type-2 wallet have over Type-1?
    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

  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)

We don’t know who as public addresses can change with every transaction.

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#187
  1. The advantage it is you can backup once and it stays backed up forever because all future addresses are determined in advance. It can also be stripped down to a very small size which could be easily backed up on paper (e.g. with a QR code);
  2. The main difference is in type-2 you can separately secure the Master_private_key;
  3. The anonymity is link to all unknown users in the blockchain.
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#188
  1. The main advantages of a deterministic wallet are that once you back it up it says backed up forever and new data can be add to the private key.
  2. type-2 can create new addresses for each new transaction, with out changing the private key. created by Gregory Maxwell.
    3.A new public address is created for each new transaction.
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#189

  1. Simply when you backup once, it will be backed up continuously because all future addresses are being determined in advance.

  2. The Type-2 wallet can secure the master private key and generate new addresses.

  3. New transactions are normally had a new public addresses.

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#190

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    You can make a backup once and it stays forever, in result it makes the process easier.
    Also the positive side of a non-determistic wallet is that it becomes “unstolen” over time but people are frequently reusing addresses and attackers will not act slowly regardless.

  2. What advantage does a Type-2 wallet have over Type-1?
    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

  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)
    So Bob is now just a random address, and the receiver could be anyone, so anonymity set = the set of all Bitcoin users whose address is unknown.

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#191
  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?

Back up one Master key and with only one private key affords you multiple public keys

  1. What advantage does a Type-2 wallet have over Type-1?

Secure the private key and New addresses without private key

  1. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)

Anonymity can be assured provided any one address is used only once - Anonymity Set= All unknowns

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#192

Technically the master key generates (deterministically) new private keys. :slight_smile:
You can read more about them in BIP32.

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#193

Deterministic Wallets - Reading Assignment

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    It will stay backed up forever after it has been backed up once, because all future addresses are determined in advance.
    It also doesn’t have the increased pressure to keep wallet online.

  2. What advantage does a Type-2 wallet have over Type-1?
    It can separately secure the Master Private key, but still generate new addresses.

  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)
    The Public address will change after every transaction.
    The sender will therefor have much harder time to find out how wealthy the receiver is, by just look into receiver’s public key history.
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#194

thank you esp for your invaluable feedback and also such a great link!! https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki

#195

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    In a deterministic wallet you can backup once and it stays backed up forever because all future addresses are determined. This is in contrast to the non-determinstic wallets where the keys are random but are precomputed ahead.

  2. What advantage does a Type-2 wallet have over Type-1?
    A Type-2 wallet works in the same way as a Type-1 wallet, but it can store in a secure way the Master Private Key of the wallet while generating public keys that would allow greater security by making it impossible to find out the original private key.

  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)

  4. As I understand, If the address is never reused, the anonymity set is potentially all unknown bitcoin addresses.

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#196
  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    You only have to back it up once,
  2. What advantage does a Type-2 wallet have over Type-1?
    Type-2 you can separately backup the master key while still generating new addresses.
  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)
    Full anonymity if you don’t reuse an address (I didn’t fully get that myself! :D)
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#197

The anonymity set is basically all unknown addresses, not reusing addresses further boosts privacy but it more or less default on wallets now. :slight_smile:

#198
  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
  2. What advantage does a Type-2 wallet have over Type-1?
  3. What is the anonymity set for a receiver using a Deterministic Wallet? (hint: to someone who knows another of Bob’s addresses, how many other unknown addresses on the blockchain might be Bob’s?)

1- You only need to back up once and they can easily be backed on paper.

2- It secures the private Key while generating new Public Keys.

3- New transactions has new addresses.

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#199
  1. The advantage of using a deterministic wallet is that all future addresses are predetermined and it only needs to be backed up once. It can be backed up on paper.
  2. The advantage of a type 2 wallet is that you can store the private key separately. Multiple addresses can be generated from the public key.
  3. If I understand the question correctly, then the anonymity set for a person who knows one of Bob’s other addresses is very large because Bob generated and used the new address only once; therefore, everyone on the blockchain who also has a single address not linked to an identity would be part of the anonymity set. Is this correct? HELP!
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#200

Yes, basically the anonymity set is the number of all unknown addresses on the blockchain. :slight_smile:

#201

Thank you for your prompt response.:relieved:

#202
  1. It’s a wallet which you can backup once and it stays backed up forever because all future addresses are determined in advance.

2.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

3.Anonymity set = all addresses/all users, the receiver could be anyone.

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#203

Deterministic Wallets - Reading

  1. An advantage of using a Deterministic Wallet as opposed to generating different key repairs is that you backup the wallet once and it stays backup forever, because all future addresses are determined in advance.

  2. The advantage that a Type-2 has over a Type-1 is you can separately secure the Master_ private key, but still generate new addresses. It prevent a hacker from accessing the private key.

  3. The anonymity set for a receiver using Deterministic wallet (in this case with Bob) is that Bob the receiver could use any address he choses for funds to be sent. It does not matter if he does not own the address. Alice would just have to send as directed by Bob.

Alice private key ----------> Bobs many addresses.

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