In order to improve the recovery of the funds, the cryptocurrency developers designed the HD wallets. These wallets allow the use of a series of codes or mnemonic words that help to recover the private key and with it the funds they retain.

Un purse cryptocurrenciesIn addition to offering a graphical interface to use a cryptocurrency in a simple way, it is also responsible for creating addresses. The addresses they have an associated private key, and without that private key the funds associated with the address cannot be moved.

In the early days of Bitcoin, these private keys were generated randomly, forcing each new address to be created with a new backup. In other words, each new transaction required a backup due to the directions of change.

Due to this, some users preferred to use the same Bitcoin address repeatedly, although we know that this is not recommended to maintain privacy. But with the arrival of HD Wallets everything changed for the better. Let's see what HD Wallets are, what features they have, what they are and how they work in the wonderful crypto world.

What are HD Wallets?

The Hierarchical Deterministic Wallets or as they are commonly known HD Wallets, are cryptocurrency wallets that they use a single seed of 12, 18 or 24 keywords, with which they can generate an unlimited number of addresses. This is done automatically, hierarchically, and sequentially. However, remembering the seed is somewhat complicated since it is an illegible alphanumeric character string, therefore, the mnemonic codes. They make this seed understandable words for us, so making a backup is much easier and more practical.

Thus, the implementation of this type of wallets solves the problem presented at the beginning of having to make so many backup copies and generate addresses manually. Now with HD Wallets it is only necessary to make a backup of the seed, which is based on a Bitcoin Enhancement Protocol (BIP), known as the 32 BIP.

Mathematically, BIP 32 allows the wallet to generate, from the seed, a hierarchical structure of private keys in the form of a tree. Thus, when a device is lost or damaged, it is possible to restore the wallet with all the private keys of the tree, and of course with all the funds, with the seed backup. And this is the wonder of implementing this technology.

HD Wallets also employ the SHA-256 algorithm for the recreation of this tree without any error once the initial key entered is correct.

Electrum showing the seed of an HD Wallets

Features of HD wallets

  1. They use a single seed of 12, 18 or 24 keywords.
  2. It only requires doing back up the seed (seed in English) generated for, later in case of loss or damage, restore the wallet and all its funds.
  3. From the same initial seed, you can generate infinite key pairs for different cryptocurrencies. This thanks to the BIP 32 protocol that allows the creation of secondary keys in a hierarchical way.
  4. It is also possible generate infinite number of public addresses, for receiving payments that help maintain and guarantee users' financial privacy.
  5. They offer a fairly high level of security because with each new transaction a new address is generated. So hacking them is quite difficult and complicated.
  6. They are fully or partially compatible with other systems that use BIP 32/39/44 standards. They are increasingly used, so in the future there will be more wallets compatible with each other.
  7. Allow to generate public master keys so that with it anyone can see all the directions that can be generated with that seed. This is widely used by auditors who require reviewing the operations of a complete wallet.

Recommendations for use

As you have probably already noticed, the seed is the most important element in wallets, either at the time of its configuration or its restoration. Therefore, protecting it is essential to guarantee the security and integrity of our funds.

  1. Recommended make a proper backup of it, transferring it verbatim and exactly as the purse indicates it during its configuration. That is, you must ensure that you are copying them exactly and in the same order that your wallet displays them.
  2. It's essential safeguard and protect the seed in a safe place. If anyone else has access to your seed, or you lose it and someone finds it, that person can have access to your funds. Even if it doesn't use the same device that you own.
  3. It is not recommended to store your seed digitally. Since computers, mobile devices, emails and personal accounts can be hacked. Therefore, the suggestion is to save it on a physical medium, it can be written on paper, seal it, and protect it in a safe.
  4. When you're backing up the seed, it is recommended that you be alone. And that is out of reach of a camera that can capture your data.
  5. Of course, by transferring them written on paper, they are prone to environmental damage over time. Therefore, you should store them in a safe place that is not exposed to water or another agent.
  6. Some developers allow users to configure personal passwords. Be sure to design phrases that are not related to you or to each other. Because if a pattern is detected, it will be easier for a hacker to breach your security.
  7. According to the standards with which the seeds were generated, they are compatible with other wallets that operate with them. Regardless of whether they are from different software or hardware. However, There is a risk that it will be difficult for you to access certain currencies or altcoins since not all wallets operate the same cryptocurrencies. Therefore, if you are going to transfer your seed to another wallet, first make sure that it operates with the cryptocurrency (s) you own.

How much do you know, cryptonuta?

Do all cryptocurrencies offer support for HD wallets?


In theory HD wallets could be applied to all cryptocurrencies that exist, but this is quite complex due to changes in the cryptographic algorithms that are used to generate addresses. An example is the Waves cryptocurrency, which does not offer support for this type of applications. Therefore, you must be aware of the capabilities of your cryptocurrency, the blockchain that makes it possible to operate, and the wallet that you use to manage it.

Some examples of HD Wallets

To date, there are several types of HD Wallets that we can use to safeguard our cryptocurrencies. Some of them are totally free and others, on the contrary, do require a certain investment. Among the most common and popular on the market we find the following:

  1. Electrum.
  2. Safe deposit.
  3. Ledger.
  4. Mycelium.

Bit2Me Wallet, a powerful and secure wallet

Certainly HD wallets are very versatile and offer great security. But its use can be very complicated for some people who just want to have access to Bitcoin without major complications. Well, for those cases, Bit2Me Wallet Is the best solution. With an easy-to-use design and centered in security, Bit2Me Wallet offers its users the ability to enjoy the world of cryptocurrencies using a simple web browser.

Carry out all the operations you want, being sure that your funds are protected by a company with a long history in the crypto world. You can open a multi-crypto wallet with Bit2Me Wallet in just 20 seconds clicking here.