After lots of wallet testing, I'm thinking that only account level 0 should be used. Especially, when you consider restoring a wallet from the seed phrase.

m / purpose' / coin_type' / account' / change / address_index

seed phrase: The 12 or 24 word mnemonic. AKA Recovery Seed. BIP39.

passphrase: An optional string that is combined with the seed phrase to create a seed. Sometimes called the 25th word (*cringe*). Also in BIP39.

Because most wallets make it simple to change the passphrase and difficult to change the derivation path for an installed seed, I think changing the passphrase to create new "wallets" from a seed is better/safer than trying to increment account to create new wallets.

Isn't it safer to always use account 0 because restoring a seed phrase will usually default to showing the user account 0? If you had used account 1, it seems easier to forget this, not know how to specify it, and overlook your bitcoin stored in non-0 accounts.

Instead of generating and securing multiple seed phrases (eg. one for each wallet), there's an argument to securely storing just ONE seed phrase and using that seed phrase for all wallets (even all coin types). This way you wouldn't have to etch new metal plates and visit deep-cold storage as often; if it's a pain to do, you might not do it. The account field would seem like the way to go then: Increment the account number each time you need a new wallet. However, I've not found a wallet that easily restores accounts other than account 0.

Are there wallets that scan for funds in accounts >0? I'm thinking of something like the gap-limit when scanning addresses for funds.

Instead of using account in the derivation path, it's easy to just restore a wallet with a passphrase. Entering the passphrase is usually a menu option or a dialog box when you connect the hardware wallet. Of course, this means you need to manage passphrases but it seems easier to restore this way, at least to me.

Some wallets require you to re-enter the 12/24-word seed phrase every time you want to change the derivation path. This requires retrieving the seed phrase from a deep-cold vault. If you used passphrases, you would simply enter other passphrases to switch wallets.

What has been your experience with using account in the derivation path?

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