Derivation path
The route a wallet follows to calculate individual keys from your seed phrase, for example m/84'/0'/0'. If another wallet uses a different path when you restore, it looks empty – even though nothing has been lost.
AlsoHD pathderivation schemeBIP 44 pathgap limit
A practically unlimited number of keys can be calculated from one seed phraseGlossarySeed phrase (recovery phrase)A sequence of usually 12 or 24 words from which your wallet derives all its private keys. Anyone who knows the words has full access to your bitcoin – so they belong in an offline backup and never in anyone else’s hands.On the learning path: Stage 5 · Step 3 – Backing up your seed phrase →In the glossary →. The derivation path determines which of them a wallet uses, for example m/84'/0'/0'/0/5.
How to read it
After the master key m come five levels:
| Level | Example | Meaning |
|---|---|---|
| purpose | 84’ | Address type: 84’ Native SegWit (bc1q…), 86’ Taproot (bc1p…), 44’ Legacy (1…) |
| coin_type | 0’ | Bitcoin (1’ = testnet) |
| account | 0’ | first account |
| change | 0 | 0 = receiving addresses, 1 = change |
| address_index | 5 | sixth address (counting from 0) |
The apostrophe marks a ‘hardened’ derivation, which gives the upper levels extra protection.[1],[2],[3]
Why it matters to you
If you restore your words in a different wallet, it has to use the same path. Otherwise it shows different addresses with a zero balance – your bitcoin is still there. Many wallets detect common paths on their own; if not, you choose the path in the advanced settings.
Then there is the gap limit: after 20 unused addresses in a row, a wallet stops searching.[1] Funds on later addresses stay hidden until you raise the limit.
Related terms
These terms are closely connected.
- This termDerivation path
- Seed phrase (recovery phrase)A sequence of usually 12 or 24 words from which your wallet derives all its private keys. Anyone who knows the words has full access to your bitcoin – so they belong in an offline backup and never in anyone else’s hands.
- xpub (extended public key)An extended public key from which all the addresses of a wallet account can be calculated. Nobody can spend bitcoin with it – but anyone who knows it can see your entire account history.
- BIP 39 (standard for seed words)The widely used standard that turns random data into 12 to 24 words from a fixed list of 2,048 words. Your wallet calculates all its keys from these words – BIP 39 is behind most seed phrases.
- Bitcoin addressA string of characters like ‘bc1q…’ that someone can send bitcoin to. It is usually derived from a public key, can be shared without risk to your funds and should be generated afresh for every payment.
- Private keyA secret, randomly generated number that you use to sign transactions and so control your bitcoin. Anyone who knows the private key can spend the bitcoin that belongs to it – it must never fall into anyone else’s hands.
Explained in depth
These articles go into more detail:
- Deep dive · Stage 5Testing recoveryHow to check that your wallet backup works when it matters, why a restored wallet can look empty and what you can do if you lose access.
- Deep dive · Stage 5Keys & addressesPrivate key, public key, address and seed phrase: how they fit together, why the path only runs one way and what 1, 3, bc1q and bc1p mean.
More from „Wallets & security“
Sources3 sources · 1 publishers
The superscript numbers in the text refer to these sources.
- BIP 44: Multi-Account Hierarchy for Deterministic Wallets – Bitcoin Improvement Proposals (Palatinus, Rusnak), 24.04.2014 (accessed 28/09/2026)
- BIP 84: Derivation scheme for P2WPKH based accounts – Bitcoin Improvement Proposals (Pavol Rusnak), 28.12.2017 (accessed 28/09/2026)
- BIP 86: Key Derivation for Single Key P2TR Outputs – Bitcoin Improvement Proposals (Ava Chow), 22.06.2021 (accessed 28/09/2026)
This entry is for education only and is not investment, tax or legal advice.