BIP-85 is an advanced feature. Make sure you understand how it works before you use it.
What is BIP-85
BIP-85 allows you to derive "entropy" from your secret recovery phrase. The entropy that is derived can be used in other wallets or applications. Even if that wallet is compromised and the derived entropy is compromised, the parent secret recovery phrase (and all other derived entropies) are still safe. This allows you to manage multiple secret recovery phrases (eg. for multiple wallets) while only having to back up one.
What are the use cases for BIP-85
- Financial Structure: Most organizations have a hierarchical structure in place, and this also involves managing funds. The financial department in an organization could want to assign a separate wallet to a separate department without giving access to the main account to any department. With BIP-85 an organization can now create different secret recovery phrases for different departments without sharing the master secret recovery phrase. If one department's finance is compromised, the whole organization and the rest department are still safe.
- Secret recovery phrase creation without the need to backup: An individual can create child secret recovery phrases for elderly parents or their kids who are unable to store or secure secret recovery phrases.
- Multi-wallet setup: A user can now own multiple wallets without worrying about backing them all up aside from the master secret recovery phrase used in generating the other wallet.
How to use BIP-85 in AirGap Vault
To derive a BIP-85 child entropy from one of your Secrets, go to the Settings page and open the detail page. Click on "Generate BIP85 Child secret recovery phrase" to get to the generation page.
On the BIP-85 Generation page, you can set a few settings.
- Mnemonic Length: This defines the length of the child secret recovery phrase
- Index: Changing the index will derive a different child secret recovery phrase, so if you want a new secret recovery phrase for a new purpose, make sure to set the index to a value you have not used before
- Advanced Mode - BIP-39 Passphrase: This allows you to set an extra passphrase that will be used to derive entropy.
To derive the same child secret recovery phrase again, all of the input values (length, index, passphrase) need to be the same. So make sure you don't forget any of the values.
On the next page you can see the derived secret recovery phrase. You can now write it on a piece of paper or directly import it into another wallet.
The child secret recovery phrase do not have to be backed up. They can always be derived again from the parent own. You just have to make sure that you properly back up your parent secret recovery phrase.
If you click on "Verify", you will be taken to a screen that lets you validate that you have written down the child secret recovery phrase correctly
BIP-85 is supported by ColdCard and the iancoleman bip39 web tool. In case you don't have access to AirGap Vault anymore, you can use either of those 2 apps to recover your BIP-85 child secret recovery phrase.
Never enter your main secret recovery phrase on an online site.