Subject: Re: [bitcoin-dev] Derivation Paths for Single Key Taproot Scripts

From: Craig Raw <[email-masked]>
Date: Wed, 23 Jun 2021 10:22:48 +0200

+1

While other derivation schemes have been proposed, the simple "purpose per
script type" based approach started with BIP44 is very widely used and has
done much to improve recoverability of wallets. The products and
understanding around this approach are now relatively mature, while backing
up an output descriptor (in addition to seed words) is still not well
understood or supported. Early standardisation around a known derivation
path will ease implementation for wallets implementing Taproot and help
prevent confusion (as we have had over the still draft BIP48). I also agree
we don't need (and should avoid) a new version for extended key
serialization.

Craig

On Wed, Jun 23, 2021 at 3:17 AM Andrew Chow via bitcoin-dev <
[email-masked]> wrote:

> Hi All,
>
> I would like to propose a simple derivation path scheme for keys to be
> used in single key Taproot scripts. This is based on BIP 44 so it is
> basically identical to BIPs 49 and 84. Like with those BIPs, the actual
> value to be used in the purpose level will be set to the BIP number,
> once assigned.
>
> Note that the keys derived in this method should be for the Taproot
> internal key, which should then be tweaked with the hash of itself as
> recommended by BIP 341. The keys derived at this path should not be used
> directly as the Taproot output pubkey. Additionally, this BIP does not
> specify new version bytes for extended key serialization because, with
> the advent of descriptors, I think that is unnecessary. In fact, this
> BIP feels somewhat unnecessary to me, but it seems like it will be
> needed for now in order to drive adoption and implementation of Taproot
> into software and hardware wallets.
>
> The text can be viewed below, with the rendered text available at
>
> https://github.com/achow101/bips/blob/taproot-bip44/bip-taproot-bip44.mediawiki
>
> Andrew Chow
>
> ---
>
> <pre>
>    BIP: bip-taproot-bip44
>    Layer: Applications
>    Title: Derivation scheme for P2TR based accounts
>    Author: Andrew Chow <[email-masked]>
>    Comments-Summary: No comments yet.
>    Comments-URI:
> https://github.com/bitcoin/bips/wiki/Comments:BIP-taproot-bip44
>    Status: Draft
>    Type: Informational
>    Created: 2021-06-22
>    License: BSD-2-Clause
> </pre>
>
> ==Abstract==
>
> This document suggests a derivation scheme for HD wallets whose keys are
> involved in single key
> P2TR ([[bip-0341.mediawiki|BIP 341]]) outputs as the Taproot internal key.
>
> ===Copyright===
>
> This BIP is licensed under the 2-clause BSD license.
>
> ==Motivation==
>
> With the usage of single key P2TR transactions, it is useful to have a
> common derivation scheme so
> that HD wallets that only have a backup of the HD seed can be likely to
> recover single key Taproot
> outputs. Although there are now solutions which obviate the need for
> fixed derivation paths for
> specific script types, many software wallets and hardware signers still
> use seed backups which
> lack derivation path and script information. Thus we largely use the
> same approach used in BIPs
> [[bip-0049.mediawiki|49]] and [[bip-0084.mediawiki|84]] for ease of
> implementation.
>
> ==Specifications==
>
> This BIP defines the two needed steps to derive multiple deterministic
> addresses based on a
> [[bip-0032.mediawiki|BIP 32]] master private key.
>
> ===Public key derivation===
>
> To derive a public key from the root account, this BIP uses the same
> account-structure as
> defined in BIPs [[bip-0044.mediawiki|44]], [[bip-0049.mediawiki|49]],
> and [[bip-0084.mediawiki|84]],
> but with a different purpose value for the script type.
>
> <pre>
> m / purpose' / coin_type' / account' / change / address_index
> </pre>
>
> For the <tt>purpose</tt>-path level it uses <tt><BIPNUMBER>'</tt>.
> The rest of the levels are used as defined in BIPs 44, 49, and 84.
>
> ===Address derivation===
>
> To derive the output key used in the P2TR script from the derived public
> key, we use the method
> recommended in
> [[bip-0341.mediawiki#constructing-and-spending-taproot-outputs|BIP 341]]:
>
> <pre>
> internal_key:       lift_x(derived_key)
> 32_byte_output_key: internal_key + int(HashTapTweak(bytes(internal_key)))G
> </pre>
>
> In a transaction, the scripts and witnesses are as defined in
> [[bip-0341.mediawiki#specification|BIP 341]]:
>
> <pre>
> witness:      <signature>
> scriptSig:    (empty)
> scriptPubKey: 1 <32_byte_output_key>
>                (0x5120{32_byte_output_key})
> </pre>
>
> ==Backwards Compatibility==
>
> This BIP is not backwards compatible by design.
> An incompatible wallet will not discover these accounts at all and the
> user will notice that
> something is wrong.
>
> However this BIP uses the same method used in BIPs 44, 49, and 84, so it
> should not be difficult
> to implement.
>
> ==Test vectors==
>
> TBD
>
> ==Reference==
>
> * [[bip-0032.mediawiki|BIP32 - Hierarchical Deterministic Wallets]]
> * [[bip-0043.mediawiki|BIP43 - Purpose Field for Deterministic Wallets]]
> * [[bip-0044.mediawiki|BIP44 - Multi-Account Hierarchy for Deterministic
> Wallets]]
> * [[bip-0049.mediawiki|BIP49 - Derivation scheme for
> P2WPKH-nested-in-P2SH based accounts]]
> * [[bip-0084.mediawiki|BIP84 - Derivation scheme for P2WPKH based
> accounts]]
> * [[bip-0341.mediawiki|BIP341 - Taproot: SegWit version 1 spending rules]]
>
>
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