[bitcoin-dev] BIP Proposal: Receiving and Change Derivation Paths in a Single Descriptor

[Andrew Chow]

Hi All,

I would like to propose a BIP that de-duplicates and simplifies how we
represent descriptors for receiving and change addresses. Under the
existing BIPs, this requires two descriptors, where the vast majority of
the descriptors are the same, except for a single derivation path
element. This proposal allows descriptors to have a single derivation
path element that can specify a pair of indexes. Parsers would then
expand these into two almost identical descriptors with the difference
being that the first uses the first of the pair of indexes, and the
second uses the second.

The proposed notation is `<a;b>`. As an example,
`wpkh(xpub.../0/<0;1>/*)` would be expanded into `wpkh(xpub.../0/0/*)`
and `wpkh(xpub.../0/1/*)`.

This also works for descriptors involving multiple keys - the first
element in every pair is used for the first descriptor, and the second
element of each pair in the second descriptor.

The full text of the BIP can be found at
https://github.com/achow101/bips/blob/bip-multipath-descs/bip-multipath-descs.mediawiki
and also copied below. An implementation of it to Bitcoin Core is
available at https://github.com/bitcoin/bitcoin/pull/22838.

Any feedback on this would be appreciated.

Thanks,
Andrew Chow

---

<pre>
   BIP: multipath-descs
   Layer: Applications
   Title: Multipath Descriptor Key Expressions
   Author: Andrew Chow <andrew at achow101.com>
   Comments-Summary: No comments yet.
   Comments-URI:
https://github.com/bitcoin/bips/wiki/Comments:BIP-multipath-descs
   Status: Draft
   Type: Informational
   Created: 2022-07-26
   License: BSD-2-Clause
</pre>

==Abstract==

This document specifies a modification to Key Expressions of Descriptors
that are described in BIP 380.
This modification allows Key Expressions to indicate BIP 32 derivation
path steps that can have multiple values.

==Copyright==

This BIP is licensed under the BSD 2-clause license.

==Motivation==

Descriptors can describe the scripts that are used in a wallet, but
wallets often require at least two descriptors for all of the scripts
that they watch for.
Wallets typically have one descriptor for producing receiving addresses,
and the other for change addresses.
These descriptors are often extremely similar - they produce the same
types of scripts, derive keys from the same master key, and use
derivation paths that are almost identical.
The only differences are in the derivation path where one of the steps
will be different between the descriptors.
Thus it is useful to have a notation to represent both descriptors as a
single descriptor where one of the derivation steps is a pair of values.

==Specification==

For extended keys and their derivations paths in a Key Expression, BIP
380 states:

* <tt>xpub</tt> encoded extended public key or <tt>xprv</tt> encoded
extended private key (as defined in BIP 32)
** Followed by zero or more <tt>/NUM</tt> or <tt>/NUMh</tt> path
elements indicating BIP 32 derivation steps to be taken after the given
extended key.
** Optionally followed by a single <tt>/*</tt> or <tt>/*h</tt> final
step to denote all direct unhardened or hardened children.

This is modifed to state:

* <tt>xpub</tt> encoded extended public key or <tt>xprv</tt> encoded
extended private key (as defined in BIP 32)
** Followed by zero or more <tt>/NUM</tt> or <tt>/NUMh</tt> path
elements indicating BIP 32 derivation steps to be taken after the given
extended key.
** Followed by zero or one <tt>/<NUM;NUM></tt> (<tt>NUM</tt> may be
followed by <tt>h</tt> to indicated a hardened step)  path element
indicating a pair of BIP 32 derivation steps to be taken after the given
extended key.
** Followed by zero or more <tt>/NUM</tt> or <tt>/NUMh</tt> path
elements indicating BIP 32 derivation steps to be taken after the given
extended key.
** Optionally followed by a single <tt>/*</tt> or <tt>/*h</tt> final
step to denote all direct unhardened or hardened children.

When a <tt>/<NUM;NUM></tt> is encountered, parsers should produce two
descriptors where the first descriptor uses the first <tt>NUM</tt>, and
a second descriptor uses the second <tt>NUM</tt>.

The common use case for this is to represent descriptors for producing
receiving and change addresses.
When interpreting for this use case, wallets should use the first
descriptor for producing receiving addresses, and the second descriptor
for producing change addresses.
For this use case, the element will commonly be the value <tt>/<0;1></tt>

==Test Vectors==

TBD

==Backwards Compatibility==

This is an addition to the Key Expressions defined in BIP 380.
Key Expressions using the format described in BIP 380 are compatible
with this modification and parsers that implement this will still be
able to parse such descriptors.
However as this is an addition to Key Expressions, older parsers will
not be able to understand such descriptors.

This modification to Key Expressions uses two new characters: <tt><</tt>
and <tt>;</tt>.
These are part of the descriptor character set and so are covered by the
checksum algorithm.
As these are previously unused characters, old parsers will not
accidentally mistake them for indicating something else.

==Reference Implementation==

https://github.com/bitcoin/bitcoin/pull/22838