Common Derivation Paths Compared – Legacy, SegWit, Native
Modern wallets support several derivation path standards beyond the original BIP-44. Each uses a different purpose value in the second position to signal the address format and script type. Understanding these differences helps when switching wallets, recovering funds, or verifying compatibility between software.
Legacy – m/44'/…
This is the original BIP-44 path with purpose 44 hardened. It generates Pay-to-Public-Key-Hash addresses starting with 1 on Bitcoin. These addresses are widely accepted but have higher transaction fees and less privacy compared to newer formats. Most older wallets default to this path.
Nested SegWit – m/49'/…
Purpose 49 hardened creates Pay-to-Script-Hash wrapped SegWit addresses starting with 3. These are backward compatible with older systems while still benefiting from SegWit discounts on fees. Many wallets adopted this as a transition format before native SegWit became standard.
Native SegWit – m/84'/…
Purpose 84 hardened produces Bech32 addresses starting with bc1. These are pure SegWit addresses offering the lowest fees and best privacy features. Most modern wallets now recommend or default to this path for Bitcoin transactions.
Taproot – m/86'/…
Purpose 86 hardened is used for Taproot addresses, also starting with bc1 but using a different script version. Taproot improves privacy, efficiency for complex scripts, and enables new features like Schnorr signatures. It is the newest standard and increasingly supported.
Quick Comparison Table (text version)
- m/44' → Legacy (P2PKH, starts with 1)
- m/49' → Nested SegWit (P2SH-P2WPKH, starts with 3)
- m/84' → Native SegWit (P2WPKH, starts with bc1q)
- m/86' → Taproot (P2TR, starts with bc1p)
The visualizer recognizes these common purpose values and displays them clearly. You can experiment with each path to see how the tree structure remains consistent while the purpose changes the interpretation.
FAQ
Can I mix paths in one wallet?
Some wallets support multiple paths for the same coin, but most use only one to avoid confusion and ensure full balance visibility.
Which path should I use today?
For Bitcoin, native SegWit (84') or Taproot (86') are recommended for new wallets due to lower fees and better features.
Does Ethereum use these same purpose values?
Ethereum typically uses purpose 44' like legacy Bitcoin, but follows its own address format rules after that.
The next post explains why the tool strictly validates hardening rules on certain levels.