Deterministic Wallets - Reading Assignment

Privacy Coins - Ultimate Course
#123

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
A Deterministic wallet only has to be backed up one time. When generating different key pairs it generates a different public key each time.

2. What advantage does a Type-2 wallet have over Type-1?
The type two wallet has a master (parent) private key which offers it greater protection.

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 receiver could be any public address. Therefore the anonymity set is all public addresses on the Blockchain.

#124

  • What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    In a Deterministic wallet all future addresses are determined in advance and once they are backed up they remain backed up forever.The wallets can also be stripped down to a very small size which makes it possible to back them up on paper (e.g. with a QR code). On the other hand, in non-determistic wallets, it is only safe to backup at lease every 100 addresses or sends because the keys are randomly generated but are pre-computed ahead. With time it becomes harder do a backup on paper due to size.

  • What advantage does a Type-2 wallet have over Type-1?
    The master key can be secured separately.

  • 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?)
    New addresses are created for every transaction.

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#125

1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
The advantage is that you have only one address, which will not make the user confusing.

2. What advantage does a Type-2 wallet have over Type-1?
Type 2 can generate a variety of new addresses so that it makes the wallet more secure.

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?)
Every time generate a new public key.

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#126

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.

2. What advantage does a Type-2 wallet have over Type-1?
The Type-2 wallet uses ecliptic curve computational to enhance security protocol and safeguard private key.

3. What is the anonymity set for a receiver using a Deterministic Wallet?
Every new transaction can have a new public address

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#127
  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
  • There is one key which can be used to access future keypairs. Easier backup.
  1. What advantage does a Type-2 wallet have over Type-1?
  • Type-2 has two backup elements - Master private key and Random seed. Random seed is used to generate new addresses, but it cannot see the private keys of these addresses. Master private key would be stored offline, while the seed would live on a server and generate addresses for daily transactions.
  • Revealing the seed would compromise privacy, but the funds would still be safe.
  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?)
  • If Bob keeps his Random seed safe, noone knows his public addresses, except the ones he has shared.
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#128

  1. Derermenistic wallet is need to be backed up once and it can be easily stored on a paper, while regular wallet need to have more space because of gemerating many keypairs and needs to be backed up regulary.

  2. type 2 is more secure then type A because it secures master private key seperately and generates other keys from it. so even if hacked the hacker may get public keys but he will not be able to reach pricate keys.

  3. because deterministic wallet changes the adress after each transaction, there can be as many as there are transactions.

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#129
  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.
  2. What advantage does a Type-2 wallet have over Type-1? ECC does not equal RSA, you only need as much data is in a private key to create one. If server was hacked, hacker cannot steal any money.
  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?) None.
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#130

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    Backup-ability with smaller QR code like wallet backups

  2. What advantage does a Type-2 wallet have over Type-1?
    you can seperately secure 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?)
    only bob?

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#131

Correct, because you can’t know that a specific address is part of a HD wallet. :slight_smile:

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#132

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    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. 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). This is in contrast to the current non-determinstic wallets where the keys are random but are precomputed ahead so that you’re safe only if you backup at least every 100 ‘get addresses’ or sends, and which grow larger and harder to backup on paper over time.

  2. What advantage does a Type-2 wallet have over Type-1?
    A Type-2 wallet can hash public keys while keeping the master private key separate and secure.
    Publickey(type,n) = Master_public_key + H(n|S|type)*point.

  3. What is the anonymity set for a receiver using a Deterministic Wallet?
    Public addresses can be changed after every transaction and also potentially all unknown bitcoin addresses.

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#133
  1. A wallet that you can backup once and stays backed up forever and can be stripped down in size to backup on paper.
  2. The 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. You can generate a new address after each transaction and you can safely secure the master key separately
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#134
  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    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. 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?)
    I guess its 1000 … or 999

Im clearly not the best at these 2 last lectures … Could anyone explain what does the guy means by: The current wallets unsteal themselves. PLEASEEEE

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#135

Your BitLaundry answers were fine imo :slight_smile:

Theoretically in the future someone might generate the same seed or an address that is derived from that seed and you could then steel the funds from that address.
I don’t think this is that possible, its kind of the same as thinking you will generate the same address like someone else. It can happen, but its highly unlikely.
BIP39 mnemonic code has 2048 and if you have 24 words that is 2048^24 possible combinations. :slight_smile:

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#136

  1. It’ simpler and easier. You only have to back it up once as all future addresses are derived from a single seed or master key, whereas with non-deterministic wallets a new key-pair is generated with every transaction which needs to be backed up.

  2. You can separately secure the Master Key.

  3. Unlimited - public addresses change after every transaction.

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#137

The primary advantage of using a deterministic wallet, is that a huge set of new addresses to be associated with private keys or seeds is created or can be created, thus reducing the need to genrate random new private/Public key pairs over time. This helps to prevent loss. An advantage that type two wallets have over type one is that the key creation is further linked by a shared scret, which allows for future creation of new adresses very easily and provides enhanced security. This allows the master key to stored separately and helps to prevent it from bieng compromised. Another interesting convenience is that the determinitic wallet can be easily reduced down t a simpler ket to store, as it is only set in a pure form, and can be saved on a single sheet of papaer or also as a QR CODE.
If I am correct, the anonymity set for the receiver from a deteministic wallet would be the number of owners of unknown addresses on the Bitcoin except Bob and the individual who has sent Bob funds before, and any adress that mihgt otherwise be connected to BOB on any transaction that might have happened before the most recent Transaction from BOB. AQll addresses created after this transaction would not be included… . A very large number

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#138
  1. You can backup once as all future addresses are determined in advance
    2.you can separately secure the master private key but generate new addresses with the public key
    1. Public addresses are changeable after every transaction
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#139

1.)
You can handle many different key pairs and different crypto assets with just one single seed (24 words on Ledger Nano S)

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.)
You can use an new address at any time if you receive Bitcoin.
That makes your total credit less traceable.

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#140

1.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)

  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

  2. an infinite amount ?? not sure

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#141

Theoretically yes, in practice each derivation path is a 32 bit integer so you can have a max of 2^32 keys per derivation path with a maximum depth of 256, enough keys to assume no one will ever need that many. :stuck_out_tongue:

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#142

1.its a wallet that can be backup only once as all future addresses are determined in advance
2.the advantage is separate scuring master private key and generate new addresses with ti.
3. one as there is only one receiver.

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