A BIP-85 wallet refers to a wallet that implements the BIP-85 (Bitcoin Improvement Proposal 85) standard. This standard enables the deterministic derivation of independent Bitcoin wallets from a single master seed, allowing users to create and manage multiple wallets using one backup mnemonic seed.
A wallet that supports BIP-85 allows you to generate separate entropy values for each derived wallet using the BIP32 hierarchical deterministic (HD) wallet structure. These entropy values can then be used to create mnemonics (word lists) according to the BIP-39 standard or with other wallet generation methods.
Advantages of using a BIP-85 wallet include:
- Simplified backup: With a BIP-85 wallet, you only need to back up a single master seed, which can be used to generate and recover multiple wallets. This reduces the risk of loss due to mismanaged or lost backups.
- Enhanced privacy: By using independent wallets for different purposes, you can improve your privacy by separating funds and avoiding address reuse.
- Easier wallet management: BIP-85 makes it easier to manage multiple wallets by providing a standardized, deterministic method for wallet generation.
Some hardware wallets and wallet software, such as Coldcard and Electrum, support BIP-85. To use BIP-85, you’ll need a wallet that supports this feature and can generate and manage BIP-85 derived wallets from your master seed. Remember that if you use BIP-85 to create multiple wallets, it’s crucial to store your master seed securely, as it will provide access to all of your derived wallets.