Hierarchical Deterministic (HD) Wallet

Hierarchical Deterministic (HD) wallets are a type of wallet that can generate a tree of key pairs from a single seed. This allows for the generation of multiple addresses from a single root seed, providing both security and convenience.

Problem

You have to maintain/store multiple public private keys if you want to have multiple wallets.

Solution - BIP-32

Bitcoin Improvement Proposal 32 (BIP-32) provided the solution to this problem in 2012. It was proposed by Pieter Wuilla, a Bitcoin Core developer, to simplify the recovery process of crypto wallets. BIP-32 introduced a hierarchical tree-like structure for wallets that allowed you to manage multiple accounts much more easily than was previously possible. It’s essentially a standardized way to derive private and public keys from a master seed.