Deterministic Wallets - Reading Assignment

Privacy Coins - Ultimate Course
#163

Why would it take a longer time?

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#164

Generating a new key for each transactions vs using one key for each transaction

#165

Ok, though deriving new keys is not really slow, takes less than a second :smiley: and most of modern wallets already do that.

#166
  1. It is a wallet that you back up once and it stays backed up forever. All future addresses are determined in advance.
    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.
  2. Public addresses are changeable after every transaction
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#167

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    A deterministic wallet can be backed up once and stays backed up forever. It can 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 is that you can separately secure the master private key, but still generate new addresses with the public 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?)
    All unknown users of the blockchain as new addresses are used.

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#168
  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.- A deterministic wallet can be backed up once and it stays backed up forever because all future addresses are determined in advance.
2.- Type 2 needs less storage to backup. In the 2nd you can secure separately the private key keeping the ability of still generating new addresses from it, so one private key for many public keys.
3.- The anonymity set is all the users because all of them can be potential receivers.

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#169

  1. Only needs backed up once.

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

  3. All unknown users of the blockchain

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#170

  • What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    Simplicity , as backing up the seeds only once (usually 12 or 24) is way easier in terms of user experience / user friendly than having to backup every single key separately as with a non-deterministic wallets.

  • What advantage does a Type-2 wallet have over Type-1?
    on Type-1 wallet if the seed is leaked, all funds are compromised, and wallet sharing is extremely limited.

  • 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 high , as its not possible to link both bob addresses unless you can link both addresses to bob. By only linking one address to bob you could not link the other one

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#171
  1. It can be easier backed up and restored.
  2. that ability to generate addresses based on the Master key without access to the private key.
  3. It is not possible to determine the next of Bob’s addresses based on his old ones. Without knowledge of private key or mater key it could be all unknown address.
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#173

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    A deterministic wallet 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 (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 large and harder to backup on paper over time.

  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?)
    Up to maybe 1000 for change addresses and 1000 for display addresses

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#174

Basically its all unknown addresses on the blockchain because you can’t determine what addresses belong to a specific master key. :slight_smile:

#175

  1. What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
    In a deterministic wallet, all the future addresses are already determined, so is only required to backup up once and stays backed up forever.

  2. What advantage does a Type-2 wallet have over Type-1?
    You can separately secure the master private key, but still generate new addresses with public 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?)
    There will be a huge number, because you can change public address each time which means an unlimited supply of new addresses.

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#176
  1. all future addresses are determined in advance so only need to backup one private key. also the size is much smaller (small enough to be backed up on paper {QR code for example})
  2. the advantage of the type-2 is that you can separately secure the master private key, but still generate new addresses
  3. new addresses have no history, so the anonymity set is all the unknown users of the blockchain
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#177

What’s the advantage of using a Deterministic Wallet, as opposed to generating many different keypairs?
Your private key is never revealed.

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

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 system would generate some (maybe 1000 of each type) addresses ahead of the furthest it has observed on the network but only bother to store the addresses. The keys can be regenerated as needed.

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#178

The advantage of deterministic wallets is that you only need to backup one key because all future keys are derived from it.

Keys are derived on the go, not in advance. But since the wallet is deterministic they are predetermined by the master key but there is no way of knowing what keys are derived from a specific key so the anonymity set is basically all unknown addresses in the blockchain. :slight_smile:

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#179
  1. 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. 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. Addresses can be changed after each interaction.
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#180

  1. The advantage of using a deterministic wallet over the generation of many different kay pairs is that it’s easier and much more simple to make a backup of it.

  2. The advantage of a “type-2” wallet is that it allows you to secure the private key while still retaining the ability to generate addresses using the public key.

  3. It’s possible to use a different public address for every transaction.

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#181

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 (e.g. with a QR code).

Whereas with a non-deterministic wallet, the keys are random but pre-determined ahead of time and so it requires the owner to backup many send/retrieve addresses which can become large and more difficult to backup on paper over time.

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?)

The addresses are unknown so there could be any x number of addresses that belong to Bob.

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#182

There is also no way to link the newly generated key pairs with the master key so the anonymity set is actually as large as the number of anonymous addresses on the blockchain :slight_smile:

#183

1 You back up your wallet
2 Type 2 can secure the parent private key and still be able to generate new addresess from it
3 Public addresses can be changed after every txns

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