BIP-85 allows you to generate multiple independent wallets (child keys) from a single master seed, simplifying wallet management. However, this convenience also means that the security of your master seed is paramount. If compromised, all derived child wallets are at risk. Here are key security practices to follow when using BIP-85 with your BitBox02 hardware wallet:
1. Secure your master seed
- Primary backup: Your master seed is the cornerstone of all your child wallets. Store it securely using methods like metal backups to protect against physical damage.
- Avoid digital copies: Do not store your seed phrase in digital formats (e.g., photos, text files) to prevent exposure to malware or unauthorized access.
- Consider advanced backup methods: Techniques like Shamir’s Secret Sharing can split your seed into multiple parts, requiring a subset to recover the full seed, enhancing security.
2. Consistent passphrase usage
- Understand passphrase impact: Using a passphrase adds an extra layer of security but also changes the derived child keys.
- Maintain consistency: Always use the same passphrase when generating or recovering child keys to ensure access to the correct wallets.
- Secure storage: Store your passphrase securely, separate from your seed phrase, and avoid digital storage methods.
3. Track index numbers diligently
- Unique indexes: Each child key is generated using a unique index number. Reusing index numbers can lead to confusion or potential security risks.
- Record keeping: Maintain a secure and organized record of the index numbers used, along with associated wallet purposes.
- Avoid predictable patterns: Using non-sequential or unpredictable index numbers can add an extra layer of security.
4. Limit exposure of child keys
- Purpose-specific wallets: Use child keys for specific purposes (e.g., daily spending, savings) and avoid unnecessary sharing.
- Compartmentalization: If a child wallet is compromised, the master seed remains secure, but it's best to minimize exposure by limiting the number of active child wallets.
- Regular monitoring: Keep an eye on the activity of your child wallets to detect any unauthorized transactions promptly.
5. Regularly review and update security practices
- Stay informed: Keep up-to-date with the latest security recommendations and updates related to BIP-85 and hardware wallets.
- Periodic audits: Regularly review your backup methods, storage locations, and access controls to ensure they meet current security standards.
- Test recovery procedures: Periodically test your ability to recover wallets from backups to ensure that your recovery process is effective.
By adhering to these security practices, you can leverage the benefits of BIP-85 while maintaining robust protection for your Bitcoin assets.