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I had a discussion today and I'm really confused. What I though is happening with each hardware wallet is this:

Seed (BIP39) 1 --> HW Wallet (ledger) --> chip1 + seed = private key 1

Seed (BIP39) 1 --> HW Wallet (bitbox) --> chip2 + seed = private key 2

Seed (BIP39) 1 --> Bitcoin Software Wallet --> Seed (is 1:1 your private key, byte conversion)

I thought that the resulting private keys will differ from each other, even if you use the same initial seed for both devices and all wallets. So that having 2 ledgers with the same seed have the same wallets, but they are not compatibly to other brands that use other hardware.

The friend told me, that this is absolutely not the case and that you could even take your ledger seed and enter it into the bitcoin core wallet (or almost any wallet for that matter) and you would still have access to those bitcoin, even if ledger went bankrupt und all devices on the planet break at once.

His arguments were, that the sole purpose of a hardware wallet is, that you never need to enter your private key on any computer. Somehow that made sense to me. But is it true that I can take my BIP39 seed from my ledger and use it on any bitcoin wallet, no matter if hardware of software?!

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Provided each wallet supports the ability to select the derivation path used by the other, your BIP39 seed can be used by either wallet.

Different companies/hardware wallets use different standard derivation paths, (although standards are here and are being adopted*) which could be a reason why e.g. your Coldcard seed doesn't work 'out of the box' with your Ledger wallet.

All self respecting wallet brands in 2021 will permit you (via an 'advanced' feature) to customise your derivation path for seed recovery/compatibility purposes. If your wallet does not support this, I'd recommend considering using a different wallet.

  • most common derivation paths used today:
BIP 44: m/44'/0'/0' (for 1addresses)
BIP 49: m/49'/0'/0' (for 3addresses)
BIP 84: m/84'/0'/0' (for bc1addresses)
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  • What lecture would you recommend on this topic? I'm currently reading "Mastering Bitcoin", not sure if there is a chapter on that.
    – codepleb
    Nov 26 '21 at 14:37
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    Just referred to my own copy of Mastering Bitcoin - in Chapter 4 - Keys, Addresses, Wallets, there's a section on Hierarchical Deterministic Wallets (BIP0032/BIP0044) that describes all about derivation paths in the context of Bitcoin seeds/wallets
    – satirn
    Nov 26 '21 at 15:40
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    Thank you very much kind sir, I'm glad you exist! :)
    – codepleb
    Nov 27 '21 at 16:20

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