A fundraising method used by new cryptocurrency projects to offer their tokens to investors in exchange for established cryptocurrencies or fiat currency.
BIP32 is a proposal for improving Bitcoin that introduces a hierarchical deterministic (HD) wallet structure for managing private keys and Bitcoin addresses. This means that a user can create a master private key that can generate all subsequent private keys in a deterministic and secure manner, allowing for easy backup and recovery of funds.The HD wallet structure works by creating a “tree” of private keys, with the master private key acting as the root. This enables the derivation of child private keys, each of which corresponds to a unique Bitcoin address, without compromising the system’s security. By using mathematical operations and a “chain code,” the child keys can be generated from the master key.
Additionally, the hierarchical deterministic structure allows the creation of “watch-only” wallets that can monitor the balance and transactions of a particular Bitcoin address without having access to the private keys. This feature can be useful for merchants or other businesses that need to track incoming payments.
Overall, BIP32 is a widely adopted standard in the Bitcoin ecosystem that provides a secure and convenient method for managing private keys and Bitcoin addresses.