Ethereum purpose allocation and path scheme for deterministic wallets

eip-600.md

@@ -0,0 +1,60 @@
+---
+eip: 600
+title: Ethereum purpose allocation for Deterministic Wallets
+author: Nick Johnson <nick@ethereum.org>, Micah Zoltu
+type: Standard Track
+category: ERC
+status: Draft
+created: 2017-04-13
+replaces: 84
+---
+
+## Abstract
+This EIP defines a logical hierarchy for deterministic wallets based on [BIP32](https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki) and the purpose scheme defined in [BIP43](https://github.com/bitcoin/bips/blob/master/bip-0043.mediawiki).
+
+This EIP is a particular application of BIP43.
+
+## Motivation
+Because Ethereum is based on account balances rather than UTXO, the hierarchy defined by BIP44 is poorly suited. As a result, several competing derivation path strategies have sprung up for deterministic wallets, resulting in inter-client incompatibility. This BIP seeks to provide a path to standardise this in a fashion better suited to Ethereum's unique requirements.
+
+## Specification
+We define the following 2 levels in BIP32 path:
+
+<pre>
+m / purpose' / subpurpose' / *
+</pre>
+
+Apostrophe in the path indicates that BIP32 hardened derivation is used.
+
+Each level has a special meaning, described in the chapters below.
+
+### Purpose
+
+Purpose is a constant set to a value to be determined; the authors of this EIP are still engaged in the standards process to obtain assignment of a 'purpose' field.
+
+The purpose field indicates that the subtree of this node is used according to this specification.
+
+Hardened derivation is used at this level.
+
+### Subpurpose
+Subpurpose is set to the EIP number specifying the remainder of the BIP32 derivation path. This permits new Ethereum-focused applications of deterministic wallets without needing to interface with the BIP process.
+
+Hardened derivation is used at this level.
+
+## Rationale
+The existing convention is to use the 'Ethereum' coin type, leading to paths starting with `m/44'/60'/*`. Because this still assumes a UTXO-based coin, we contend that this is a poor fit, resulting in standardisation, usability, and security compromises. As a result, we are making the above proposal to define an entirely new hierarchy for Ethereum-based chains.
+
+## Backwards Compatibility
+The introduction of another derivation path requires existing software to add support for this scheme in addition to any existing schemes. Given the already confused nature of wallet derivation paths in Ethereum, we anticipate this will cause relatively little additional disruption, and has the potential to improve matters significantly in the long run.
+
+## Test Cases
+TBD
+
+## Implementation
+None yet.
+
+## References
+[This discussion on derivation paths](https://github.com/ethereum/EIPs/issues/84)
+
+## Copyright
+Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).