BIP-84: Derivation Scheme for P2WPKH

BIP-84 defines the standard derivation path for Native SegWit (P2WPKH) addresses, producing addresses that start with bc1q.

Purpose

Before BIP-84:

• BIP-44 defined m/44'/0'/... for legacy addresses
• BIP-49 defined m/49'/0'/... for wrapped SegWit (P2SH-P2WPKH)

BIP-84 extends this:

• m/84'/0'/... for native SegWit (P2WPKH)

This allows wallets to:

• Manage multiple address types from one seed
• Know which address type to generate from the path
• Maintain compatibility with existing HD infrastructure

Derivation Path

m / 84' / coin_type' / account' / change / address_index

Level	Hardened	Value	Description
Purpose	Yes	84’	BIP-84 (native SegWit)
Coin Type	Yes	0’	Bitcoin mainnet
Account	Yes	0’ to n’	User accounts
Change	No	0 or 1	0 = receiving, 1 = change
Address Index	No	0 to n	Sequential addresses

Example Paths

m/84'/0'/0'/0/0   First receiving address, account 0
m/84'/0'/0'/0/1   Second receiving address, account 0
m/84'/0'/0'/1/0   First change address, account 0
m/84'/0'/1'/0/0   First receiving address, account 1

Extended Key Versions

BIP-84 introduces new version bytes for serialized extended keys:

Network	Key Type	Version	Prefix
Mainnet	Private	0x04b2430c	zprv
Mainnet	Public	0x04b24746	zpub
Testnet	Private	0x045f18bc	vprv
Testnet	Public	0x045f1cf6	vpub

This allows wallets to distinguish SegWit extended keys from legacy.

Address Generation

From derived public key to P2WPKH address:

Public Key (33 bytes, compressed)
    ↓
SHA256
    ↓
RIPEMD160
    ↓
Witness Program (20 bytes)
    ↓
Bech32 Encode (witness version 0)
    ↓
bc1q... address

Implementation

const bitcoin = require('bitcoinjs-lib');
const { BIP32Factory } = require('bip32');
const ecc = require('tiny-secp256k1');
const bip39 = require('bip39');

const bip32 = BIP32Factory(ecc);

// From mnemonic to seed
const mnemonic = 'abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about';
const seed = bip39.mnemonicToSeedSync(mnemonic);

// Derive BIP-84 account
const root = bip32.fromSeed(seed);
const account = root.derivePath("m/84'/0'/0'");

// Generate receiving addresses
for (let i = 0; i < 5; i++) {
  const child = account.derivePath(`0/${i}`);
  const { address } = bitcoin.payments.p2wpkh({
    pubkey: child.publicKey,
    network: bitcoin.networks.bitcoin
  });
  console.log(`m/84'/0'/0'/0/${i}: ${address}`);
}

Output:

m/84'/0'/0'/0/0: bc1qcr8te4kr609gcawutmrza0j4xv80jy8z306fyu
m/84'/0'/0'/0/1: bc1qnjg0jd8228aq7ez7e7n38hvkmjm8wqh6ek4zv3
m/84'/0'/0'/0/2: bc1qp59yckz4ae5c4efgw2s5njs68r8dp6k2xzqpjk
m/84'/0'/0'/0/3: bc1qgl5vlg0zdl7yvprgxj9fevsc6q6x5dmcyk3cn3
m/84'/0'/0'/0/4: bc1qm97vqzgj934vnaq9s53ynkyf9dgr05rargr04n

Python Implementation

from bip_utils import Bip39SeedGenerator, Bip84, Bip84Coins

# Generate seed from mnemonic
mnemonic = "abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about"
seed = Bip39SeedGenerator(mnemonic).Generate()

# Create BIP-84 wallet
bip84_ctx = Bip84.FromSeed(seed, Bip84Coins.BITCOIN)
account = bip84_ctx.Purpose().Coin().Account(0)

# Generate addresses
for i in range(5):
    addr = account.Change(0).AddressIndex(i)
    print(f"m/84'/0'/0'/0/{i}: {addr.PublicKey().ToAddress()}")

Extended Public Key (zpub)

The zpub at account level enables watch-only wallets:

// Export zpub
const zpub = account.neutered().toBase58();
// zpub6rFR7y4Q2AijBEqTUquhVz398htDFrtymD9xYYfG1m4wAcvPhXNfE3EfH1r1ADqtfSdVCToUG868RvUUkgDKf31mGDtKsAYz2oz2AGutZYs

// Import zpub for watch-only
const watchOnly = bip32.fromBase58(zpub);
const address = bitcoin.payments.p2wpkh({
  pubkey: watchOnly.derivePath('0/0').publicKey
}).address;

Comparison with Other BIPs

BIP	Purpose	Path	Address Prefix	Output Type
44	Legacy	m/44’/0’/…	1…	P2PKH
49	Wrapped SegWit	m/49’/0’/…	3…	P2SH-P2WPKH
84	Native SegWit	m/84’/0’/…	bc1q…	P2WPKH
86	Taproot	m/86’/0’/…	bc1p…	P2TR

Fee Savings

Native SegWit (BIP-84) provides significant fee savings:

Transaction Type	Virtual Size	Savings vs Legacy
P2PKH (legacy)	~226 vB	baseline
P2SH-P2WPKH (BIP-49)	~167 vB	~26%
P2WPKH (BIP-84)	~141 vB	~38%

Test Vector

Mnemonic:

abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about

Path	Address
m/84’/0’/0’/0/0	bc1qcr8te4kr609gcawutmrza0j4xv80jy8z306fyu
m/84’/0’/0’/0/1	bc1qnjg0jd8228aq7ece2l8nh6acv5v62d9d5qujka
m/84’/0’/0’/1/0	bc1q8c6fshw2dlwun7ekn9qwf37cu2rn755upcp6el

Account xpub:

zpub6rFR7y4Q2AijBEqTUquhVz398htDFrtymD9xYYfG1m4wAcvPhXNfE3EfH1r1ADqtfSdVCToUG868RvUUkgDKf31mGDtKsAYz2oz2AGutZYs

Agent Recommendations

1. Use BIP-84 as default for new wallets
2. Generate zpub for watch-only monitoring
3. Implement gap limit (20 addresses)
4. Support address reuse detection for privacy
5. Consider BIP-86 (Taproot) for newer deployments

Related BIPs

• BIP-32: HD wallet derivation
• BIP-39: Mnemonic seeds
• BIP-43: Purpose field definition
• BIP-44: Multi-account hierarchy
• BIP-141: SegWit consensus rules
• BIP-173: Bech32 addresses

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Machine-Readable Summary

{
  "bip": 84,
  "title": "Derivation Scheme for P2WPKH",
  "status": "final",
  "purpose_value": 84,
  "path_template": "m/84'/coin'/account'/change/index",
  "address_type": "P2WPKH",
  "address_prefix": "bc1q",
  "extended_key_prefixes": {
    "mainnet_private": "zprv",
    "mainnet_public": "zpub",
    "testnet_private": "vprv",
    "testnet_public": "vpub"
  }
}