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Edited 05wallets.asciidoc with Atlas code editor
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nadamsoreilly committed Oct 10, 2018
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Expand Up @@ -404,7 +404,7 @@ The first level, +purpose'+, is always set to +44'+. The second level,

The third level of the tree is +account'+, which allows users to subdivide their wallets into separate logical subaccounts for accounting or organizational purposes. For example, an HD wallet might contain two Ethereum "accounts": ++m/44'/60'/0'++ and ++m/44'/60'/1'++. Each account is the root of its own subtree.

((("keys and addresses", see="also public and private keys")))Because BIP-44 was created originally for Bitcoin, it contains a "quirk" that isn't relevant in the Ethereum world. On the fourth level of the path, +change+, an HD wallet has two subtrees: one for creating receiving addresses and one for creating change addresses. Only the "receive" path is used in Ethereum, as there is no necessity for a change address like there is in Bitcoin. Note that whereas the previous levels used hardened derivation, this level uses normal derivation. This is to allow the account level of the tree to export extended public keys for use in a nonsecured environment. Usable addresses are derived by the HD wallet as children of the fourth level, making the fifth level of the tree the +address_index+. For example, the third receiving address for Ethereum payments in the primary account would be M++/44&#x27;/60&#x27;/0&#x27;/0/2++. <<bip44_path_examples>> shows a few more examples.
((("keys and addresses", see="also public and private keys")))Because BIP-44 was created originally for Bitcoin, it contains a "quirk" that isn't relevant in the Ethereum world. On the fourth level of the path, +change+, an HD wallet has two subtrees: one for creating receiving addresses and one for creating change addresses. Only the "receive" path is used in Ethereum, as there is no necessity for a change address like there is in Bitcoin. Note that whereas the previous levels used hardened derivation, this level uses normal derivation. This is to allow the account level of the tree to export extended public keys for use in a nonsecured environment. Usable addresses are derived by the HD wallet as children of the fourth level, making the fifth level of the tree the +address_index+. For example, the third receiving address for Ethereum payments in the primary account would be ++M/44&#x27;/60&#x27;/0&#x27;/0/2++. <<bip44_path_examples>> shows a few more examples.

[[bip44_path_examples]]
.BIP-44 HD wallet structure examples
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