I'm trying to understand the HD wallet payment derivation procedure, so assume:

  • Ownership of a Bitcoin HD Wallet on an external smart device
  • Exported account level extended public key (xpub....) from the first account.
  • Derivation Path "m/44'/0'/0'/0/0"

What is the step-by-step procedure that one would use to derive a valid bitcoin payment address that can be confirmed with the external wallet?

The process, according to BIP32 - Child key derivation (CKD) functions, seems simple and straight-forward enough that it should be able to be written as a single function in any programming language with two processes: Base58 and HMAC-SHA512, which are such standard functions that I don't believe that it's necessary to install a platform tool and a bloated spaghetti code library to perform the derivation.


The method for deriving child keys from extended keys is specified in BIP 32.

Note that the specific derivation paths for xpubs, ypubs, and zpubs are not defined by BIP 32 but rather are constructions created by Electrum and SatoshiLabs. These have a specific meaning described in SLIP 132. Their encoding is the same as described for xpubs in BIP 32 but with a different prefix byte.

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