Ethereum: What BIP32 derivation path does Electrum use for Multisig?

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Ethereum: What BIP32 Derivation Path Does Electrum Use for Multisig?

When it comes to setting up a multisig wallet on Ethereum, users often need to create multiple signatures to ensure that all required participants have agreed on the transaction. One way to achieve this is by using BIP32 derivation paths.

BIP32 and Multisig

BIP32 (Bitcoin Internet Protocol Version 3) is a standardized method for representing Bitcoin’s public key in a hierarchical deterministic (HD) wallet format. In a multisig wallet, multiple signatures are required to prove ownership of the funds before they can be transferred.

To implement this, Electrum, one popular open-source Ethereum wallet, uses BIP32 derivation paths to create a decentralized and private wallet for multisig transactions.

What BIP32 Derivation Path Does Electrum Use?

Electrum’s implementation of BIP32 derivation paths involves creating a hierarchical structure that represents the public keys of each participant. This structure is typically represented as a Merkle tree or a similar data structure.

In particular, Electrum uses a combination of the m/0/m/0 derivation path (also known as “multisig” or “seal”) and the m/0/k derivation path to create the multisig wallet. Here’s how it works:

• The m/0/m/0 derivation path represents the public key of a single participant, with a hierarchical structure that includes multiple signatures (e.g., 1, 2, and 3).

• The m/0/k derivation path represents the private key corresponding to each participant’s signature.

• Electrum combines these two paths using a Merkle tree or other data structure, which allows for efficient verification of the signatures.

Why Electrum Uses BIP32 Derivation Paths

Electrum uses BIP32 derivation paths for multisig wallets because they provide several benefits:

• Decentralization: BIP32 allows each participant to create their own private key and sign transactions independently.

• Private ownership: Each participant has complete control over their funds, with the ability to transfer or freeze them as needed.

• Efficient verification

  : Electrum’s use of Merkle trees ensures that all signatures are verified correctly, reducing the risk of tampering or compromise.

Conclusion

In summary, Electrum uses a combination of the m/0/m/0 and m/0/k BIP32 derivation paths to create a decentralized and private multisig wallet for Ethereum. This implementation provides several benefits, including decentralization, private ownership, and efficient verification of signatures. By using BIP32 and Merkle trees, Electrum’s multisig wallet is well-suited for use in a wide range of applications, from decentralized finance (DeFi) to cryptocurrency trading.