An HD wallet, short for Hierarchical Deterministic wallet, is a type of cryptocurrency wallet that generates and manages a hierarchical tree-like structure of cryptographic keys. The key feature of an HD wallet is the use of a master seed or master key. This master seed is a random string of data, usually represented as a series of words known as a mnemonic phrase or seed phrase. From this single master seed, the wallet can generate an entire tree of cryptographic key pairs (private and public keys) deterministically through a specific mathematical algorithm.
The hierarchical nature of the key generation allows for the creation of a virtually unlimited number of key pairs from a single seed. Each branch of the tree can be thought of as a separate account or wallet address. As a result, users can conveniently manage multiple cryptocurrency addresses and accounts under a single mnemonic phrase.
HD wallets have become widely adopted in the cryptocurrency world due to their improved usability, security, and convenience compared to traditional wallets that manage individual private keys for each address separately.
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