Just like any security system targeted at a mass audience, a cryptocurrency wallet file generation system has to satisfy two requirements:
it has to be secure;
it has to be easy to use.
As one may conclude, it is not an easy task to combine these qualities in one product. A system is generally easy to use if it is easy to understand. Consequently, it is easy to understand if it is simple, and simplicity does not always equal security. With the development of the Amethyst Release, the Bytecoin Devs have chosen a design that has been tested by the industry and is familiar to users - mnemonics.
Now when the wallet is created, the app generates a mnemonic - a set of 24 words in a certain sequence. This set of words can be used to recreate the wallet file, should it be lost or corrupted.
It is important to note that not only do these words matter, but their order as well. The same set of words in a different sequence would create a different wallet file.
But a user may have an arbitrary number of addresses that are not stored in a wallet file. How does the software know the user’s addresses? This is where HD prefix comes into play.
Hierarchical Deterministic Wallet
HD stands for Hierarchical Deterministic. This kind of wallet contains cryptographic information to establish a tree-like structure of the user’s addresses. The Bytecoin devs have spent a lot of time developing the cryptography behind new, unlinkable addresses and inspired by the BIP32 standard. As it stands from the new wallet’s name, these addresses can be generated in sequential fashion, thus eliminating the need to backup the wallet file every time a new address is generated.
What makes the new addresses noticeable straight away is the bcn prefix that clearly establishes the string’s origin. As in the best traditions of software development, the new software is backward compatible with previous iteration of addresses and allows users to use wallets of both standards.
These improvements have been anticipated for a long time and there is certainty that they will be greeted with excitement from the Bytecoin community. You can already try the additions for yourself in the Stagenet with the Amethyst Release Beta. This functionality will start working in the Mainnet after the February 2019 Hardfork.
The Bytecoin Team