For those who have taken a more in-depth look at the cryptocurrency market and the various projects available, Bitcoin is often seen as a laggard in the innovation space. Ironic considering when it launched, it was the pinnacle of innovation that bought about this entire cryptocurrency gold rush.
DE-FI and dapps have been grabbing most of the headlines, and number go up because that’s all most of us care about, but you know when number go down, we’ve got to stay for the tech, right?
So for those who do care about the tech and stay for the tech, then BIP85 is a pretty cool solution that solves a problem many retail investors will have with Bitcoin.
Not your keys, not your coins
As technically savvy Bitcoiners, we often ramble on about not your keys, not your coins and the importance of generating and safeguarding your seed phrase and becoming financially independent.
But we need to face facts; not everyone has the aptitude to handle that kind of responsibility, and seed phrases can and will be lost. People aren’t going to blame themselves; that’s not how we work, we will always try to blame the system, and Bitcoin would become the scapegoat for peoples negligence and stupidity.
This is why many retail investors choose to leave their coins with custodial service, which assumes the liability and storage for the tokens. It’s why once banks offer custodial Bitcoin services, people will choose to use it; they are engineered to trust authority over trusting themselves.
Custodial wallet generation
BIP85 is a proposal that should be merged with the code in the coming months. Should all go well, that will allow you to generate multiple seed phrases from one master wallet. If you’ve created a Bitcoin hot wallet or cold storage, you’ll know how the process works.
You set up a wallet, you get your 24-word seed phrase, and you store that in a safe place. This allows you to restore your wallet to any device should you lose or damage a storage device.
You also use the private key to generate public keys tied to that address. The public keys are the ones we share freely to perform transactions.
Once BIP85 goes through, you can create a master seed phrase tied to other seed phrases. This may sound underwhelming, but it has an enormous impact on the management of coins and wallet applications.
Let’s say my Nan wants to get some BTC; I can spin up a seed phrase using my seed phrase. She can then take that sub seed phrase and use it to generate her wallet and public keys. She’ll be able to manage her wallet independently.
If she cocks it up and losses her keys, I, as the master seed phrase, can generate a new phrase and restore that wallet, so those funds are never lost.
Dangers of BIP85
Since you’re the master of other peoples wallets, you are now the last line of defence, but you can also steal peoples funds. Creating a BIP85 setup requires you to trust the master seed holder.
This could be a company or an individual in your family but remember these wallets are always open to 3rd party attack vectors.
I do think BIP85 will bring a new sense of confidence to Bitcoin, where it currently is a case of you fuck up you lose your money for good.
It will allow less tech-savvy Bitcoiners a sandbox to play around in and get used to Bitcoin, with the more experienced campaigners can be a failsafe and hold their hand along the way.