A BIP-85 wallet, which implements the Bitcoin Improvement Proposal 85 standard, offers several benefits for users who want to generate and manage multiple independent wallets using a single master seed. Here are the main reasons you might want to use a BIP-85 wallet:
- Simplified backup: With a BIP-85 wallet, you only need to back up a single master seed (mnemonic), which can be used to generate and recover multiple wallets. This reduces the risk of loss due to mismanaged or lost backups and simplifies the backup process.
- Enhanced privacy: By using independent wallets for different purposes, you can improve your privacy by separating funds and avoiding address reuse. BIP-85 makes it easier to create and manage multiple wallets deterministically from a single seed.
- Easier wallet management: BIP-85 provides a standardized, deterministic method for wallet generation and management, making it easier to handle multiple wallets. Users can organize their wallets for specific purposes, such as savings, spending, or trading, without needing to manage multiple seeds.
- Consistent recovery process: Since all derived wallets are generated from the same master seed, the recovery process is consistent across all wallets. This simplifies disaster recovery and ensures that users can regain access to all their wallets using a single backup.
While BIP-85 wallets offer these advantages, it’s crucial to store your master seed securely, as it will provide access to all of your derived wallets. Make sure you use a reputable wallet that supports BIP-85 and follow best practices for securing your seed and wallet to minimize risks.