Deterministic Wallets - Reading Assignment

[ol_frank]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   A master private can be backup once and forever. All future addresses are determined in advance. This is greatly advantageous as it makes storing your key simple and doesn’t require a great deal of space.

2. What advantage does a Type-2 wallet have over Type-1?
   The advantage of type2 over type1 is that your master key can be stored separately and still generate key pairs.

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?)
   very large, or theoretically moving towards the realm of infinite

[HemalT]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   A deterministic wallet is a system of deriving keys from a single starting point known as a seed. The seed allows a user to easily back up and restore a wallet without needing any other information and can in some cases allow the creation of public addresses without the knowledge of the private key.
2. What advantage does a Type-2 wallet have over Type-1?
   Type 2 needs less storage to backup. Type 1 creates a bunch of address on forehand, while in type 2 you can create new addresses with mathematical calculations.
3. What is the anonymity set for a receiver using a Deterministic Wallet?
   Public addresses can be changed after every transaction

[Samuel1]

Continuing the discussion from Deterministic Wallets - Reading Assignment:

1. The advantage is that a Deterministic Wallet can backup your wallet once and be saved forever.
2. A Type-1 wallet is simpler and stores a random seed, a Type-2 wallet is more complex and has the same random seed for encryption and it takes further with a secret master private key.
3. The anonymity set is high because public addresses change after each transaction.

[Alko89]

@HemalT

Type 2 needs less storage to backup. Type 1 creates a bunch of address on forehand, while in type 2 you can create new addresses with mathematical calculations.

The advantage of Type 2 wallets is that the master key can be stored separately while still generate new keypairs with the public key. This is really useful for merchants.

[Artur_Raudna]

Hi there!

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   1.1You can backup once and it stays backed up forever because all future addresses are determined in advance.
2. What advantage does a Type-2 wallet have over Type-1?
   2.1 advantage of the type-2 is that you can separately secure the Master_private_key, but still generate new addresses with
   Publickey
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?)
   3.1Limitless

[kryptokrymmenos]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   A wallet that is backed up once and stays backed up. All the future addresses are determined in advance.

2. What advantage does a Type-2 wallet have over Type-1?
   You can separately secure the master private key with the Type-2 Wallet.

3. What is the anonymity set for a receiver using a Deterministic Wallet? The public address changes after a transaction

[Maggie]

1. Using a Deterministic Wallet will require backup only once and will stay backed up forever, because all future addresses are determined in advance. On the other hand, the non-deterministic wallets require backup at least every 100 receiving/sending addresses, as the keys are random and precomputed ahead.
2. The advantage of Type-2 wallet is that you can separately secure the master_private key but still generate new addresses.
3. The anonymity is set on the transaction data with large amount of addresses generated ahead of time.

[maxs]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   A deterministric wallet is easier to backup as all future addresses are determined in advance.
2. What advantage does a Type-2 wallet have over Type-1?
   Addresses can be generated without the private key, which can be a security advantage in some cases.
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?)
   If a new address is used for each transaction, the anonymity set would be all Bitcoin addresses.

[Denzel]

1.- Once you back it up its backed up forever.

2.- You can separately secure Master_private_key

3.- Public addresses can be changed after every transaction

[walter_w]

1. easier to maintain backups
2. additional private keys can be generated from the master key
3. Since each transaction can use a different key, the set is all transactions

[ryan9632]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   You only have to backup the master key and from there all other key pairs can be derived. With the traditional method backups become longer and more difficult to manage over time.
2. What advantage does a Type-2 wallet have over Type-1?
   A Type-2 wallet makes it possible to derive all of the public keys without revealing the private keys. Which allows you to check your balances while keeping private keys in cold storage.
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?)
   You can’t undo the hash function used to create the keypair. All unknown addresses on the blockchain might also belong to the same master key.

[StuartZW]

One private key to access all public key, therefore secure backup

Type 2 wallet: (BIP32) one seed, multiple public keys, multiple front end accounts, secure

One (seed) but infinite other addresses

[Meddodreddo]

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
   Doesn’t require frequent backup
   doesn’t occupy as much space since the key pairs aren’t precomputed and stored
   Decreased need for maintaining a single wallet online
   Can be used to generate public keys as needed from a private key which would be valid without needed to store precomputed key pairs

2. What advantage does a Type-2 wallet have over Type-1?
   A master key can be stored privately, while a derivative of the master key can be used to generate new key pairs

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?)
   Infinitely large

[Fjell]

1. The advantage of using a Deterministic Wallet, as opposed to generating many different keypairs, is that you can backup a Deterministic Wallet once and it stays backed up forever. This is because all future addresses are determined in advance. Additionally, it can be stripped down to a very small size which could then be easily backed up on paper. The alternative of non-deterministic wallets generating many different keypairs is that they are only safe only if you back up at least after every 100 get addresses or sends. Which grow larger and therefore harder to backup on paper over time.
2. The advantage a Type-2 wallet has over a Type-1 is that a Type-2 wallet can separately secure the Master_private_key, but can still generate new addresses with Publickey(type,n) = Master_public_key + H(n|S|type)*point.
3. The anonymity set for a receiver using a Deterministic Wallet is that a potential hacker could enumerate all past and future addresses based on an infrequently changed public key and S, but couldn’t actually steal any of they money sent to these addresses because they would have no access to any of the private keys.

[tony1999]

1. It only has to be backed up once because all future addresses are determined in advance. It can also be condensed to a very small size, to be stored, on, for example, a QR code on paper.
2. 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. All past and future addressed could be enumerated from the wallet, if it were to be compromised. The public keys though, are changeable every transaction, which means that the anonymity set is equal to the number of public keys predetermined by the wallet. It is impossible to distinguish between them as these public keys are different every time, and even if there is only one sender, they would not be able to know the identity of the senders to that receiver.

[Timbalasian]

Deterministic wallets are easier to backed up since future addressed predetermined. The size can also be stripped down, unlike non-deterministic wallets. Backing up becomes increasingly difficult.

Having a Master Private Key makes is possible for Type 2 wallet to hide the private key and still generate various addresses.

Public addresses are new for every transaction.

[Pendar]

@Grant_Hawkins

• What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?

Type 2 wallets and it can be backed up using a “Single Master Private Key” + can easily generate addresses using ECC and be stored as a QR code.

@Grant_Hawkins

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

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

Quote: “This means that a e-commerce site could have the front end webserver with access to the public key and S, and someone who hacked the server could violate the confidentiality of the addresses in use (because he could enumerate all past and future addresses based on an infrequently changed public key) but couldn’t actually steal any of they money sent to the addresses because he would have no access to the private keys.”

@Grant_Hawkins

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?)

Should be one, if he uses a new address every time.

[kryptomagpie]

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

You can handle many different key pairs and different crypto assets with just one single seed

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

You can secure the master private key, but still generate new addresses with a public key

What is the anonymity set for a receiver using a Deterministic Wallet?

Public addresses are changed after every transaction, the anonymity set would be equal to the number of public keys pre-determined and associated to the wallet.

[dazzles]

1. It is a deterministic wallet that you only need back up once to have access to all your private keys

2. You can secure the master key separately but still generate new addresses

3. you can create new public addresses for each new transaction

[ineffable]

1. wallet that pregenerates all future keys in advance. So, once backed it stays backed forever.

2. A Type-2 wallet can generate public keys without potentially exposing the master private key.

3. All unknown users of the blockchain.