BIP 44 (Derivation Paths for P2PKH)

BIP 44 is the Bitcoin improvement proposal that standardized how hierarchical deterministic wallets organize their keys, defining the derivation path format m/44'/0'/0'/0/0 for legacy pay to public key hash (P2PKH) addresses, the original format that begins with the number 1. Published in 2014, it builds on BIP 32 key derivation and the BIP 43 purpose field convention.

Why it matters

Standard derivation paths are what make wallet recovery portable. If every wallet vendor placed keys at arbitrary positions in the BIP 32 tree, restoring a seed phrase in different software would find no funds even though the keys exist. BIP 44 gave the industry a shared map, and its structure of purpose, coin type, account, change, and address index also allowed one seed to manage multiple cryptocurrencies and multiple accounts cleanly. Coin type numbers are tracked in the SLIP 44 registry, where bitcoin is coin type 0.

How it works

The path has five levels. The first, 44', declares the standard in use. The second selects the coin, the third selects the account, the fourth separates receiving addresses from internal change addresses, and the fifth is a running index for individual addresses. The apostrophes mark hardened derivation, which prevents a leaked child key from exposing its siblings. Later standards reused this layout for newer address types, with BIP 49 covering wrapped segwit and BIP 84 covering native segwit.