What is a (Bitcoin) HD Wallet?

Many Bitcoin Wallets today are HD Wallets. But what does that actually mean?

HD stands for “hierarchical and deterministic”. HD Wallets consist of many private keys that do not exist independently of each other, but are arranged in a hierarchy. In addition, these keys are not generated on the basis of random numbers – as is customary – but are derived from a certain value in a deterministic way, i.e. following fixed rules. This original value, which is itself randomly generated for a new wallet, is also called “seed”.

Ethereum code for more privacy and comfort

HD Wallets were invented to solve two problems of classic wallets. To
One was previously often routinely used as a private key and the associated Ethereum code for multiple transactions. Transaction change was returned to an address already in use. This is bad for privacy – outsiders can more easily associate different transactions with each other, and for example estimate how much money you have available or what values you usually move.

On the other hand, each time new private keys were generated, a new backup had to be made. This is tedious and cumbersome, and increases the likelihood that backups will not be created promptly or not at all, or stored in an unsafe way for convenience.

So how do Bitcoin trader solve these problems?

You can imagine the whole thing in a very simplified way: There is a
Original value to which a positive Bitcoin trader review is added. From this combined value, a hash is calculated that acts as the basis for an actual private key. These hashes do not allow inference to the base value, nor do they have a
Connection to each other. If you know the base value, however, you can append
of consecutive numbers and perform the hash operation to calculate all hashes.

In reality the whole thing is a bit more complex, but the basic mechanism is the same. How exactly the calculation works can also be read in the specification, BIP32.

With the help of this mechanism, a HD Wallet can now generate any number of private keys and associated addresses from a single value. If you have a backup of this value, all previously generated keys are covered – as well as all keys that will be generated in the future. This solves the problem, because a backup only has to be created once and stored securely.

Thanks to a simple, never-ending stream of fresh Bitcoin addresses, an HD Wallet can now easily avoid the multiple use of an address. After each
incoming transaction, a new receiving address is generated. For each outgoing
transaction, a new address is generated for the change. Users can of course
can still accept several transactions at one receiving address, but it is no longer necessary and is largely avoided in regular operation. There are two very common extensions of the standard for HD Wallets. One of them refers to the point of hierarchy. BIP44 defines how a structure can be used for different

New details about the stock exchange

For the third time in two years, Bithumb, South Korea’s largest crypto exchange, was hacked in June 2018. SK, the country’s telecommunications giant, explained that the hack was probably caused by APT attacks.

An Advanced Persistent Threat, also known as APT, is an attack in which unauthorized hackers gain access to a network and remain undetected for a long time, with access to sensitive information and valuable data. In an interview, SK Infosec Director Lee Jae-woo said:

Bitcoin Code Stock Exchange

“The Bithumb Stock Exchange Hack is currently under investigation by the local tax authorities and the exact reason for the hack was not disclosed by the investigators. But here at SK Infosec we suspect that the stock market hack was most likely caused by Bitcoin Code an APT attack, either by intrusion into employees’ computers or the stock market’s internal system.”

Three possible scenarios
As a subsidiary of SK Infosec, SK Infosec has the task of investigating various security threats and developing solutions to combat large-scale violations. Lee suspects that the Bithumb hacking attack was caused by one of the following scenarios:

Hackers gained access to the internal server by attacking an employee with a phishing attack called Spearphishing and installing malware directly on the employee’s computer.
Direct attack on the internal server by launching an APT attack.
Attack on a public server that was hacked and infiltrated the internal server.

Attack on Bitcoin Revolution

SK Infosec researchers emphasized that the second scenario with sophisticated APT attacks Bitcoin Revolution was most likely the cause, as Bithumb has already experienced two hacks based on the first scenario.

Heavy criticism from the media
Chosun, a leading mainstream media company in South Korea, reported in June that Bithumb was aware of suspicious activity four days before the hacking attack. Despite this awareness, Bithumb was unable to prevent the attack, putting users’ capital at risk. Local authorities also warned the crypto exchanges of their poor security measures and weak internal management systems.

Since both large exchanges and smaller platforms have been unable to protect user funds and prevent security breaches, the South Korean government may require local exchanges to comply with guidelines comparable to those of banks and regulated financial institutions.

Currently, banks must spend seven percent of their total capital on cyber security and the development of systems that are used to secure user funds. With the drafting of a new crypto-regulatory framework, it is possible for the South Korean government to use part of its funds and capital to improve its security measures.