From 330b56b35867fa403634bf8d0ede0d2cb235aab5 Mon Sep 17 00:00:00 2001
From: Andrew Chow <achow101-github@achow101.com>
Date: Tue, 22 Jun 2021 20:59:29 -0400
Subject: Specify BIP 86: Key Derivation for Single Key P2TR Outputs

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+<pre>
+  BIP: 86
+  Layer: Applications
+  Title: Key Derivation for Single Key P2TR Outputs
+  Author: Andrew Chow <andrew@achow101.com>
+  Comments-Summary: No comments yet.
+  Comments-URI: https://github.com/bitcoin/bips/wiki/Comments:BIP-0086
+  Status: Draft
+  Type: Standards Track
+  Created: 2021-06-22
+  License: BSD-2-Clause
+</pre>
+
+==Abstract==
+
+This document suggests a derivation scheme for HD wallets whose keys are involved in single key
+P2TR ([[bip-0341.mediawiki|BIP 341]]) outputs as the Taproot internal key.
+
+===Copyright===
+
+This BIP is licensed under the 2-clause BSD license.
+
+==Motivation==
+
+With the usage of single key P2TR transactions, it is useful to have a common derivation scheme so
+that HD wallets that only have a backup of the HD seed can be likely to recover single key Taproot
+outputs. Although there are now solutions which obviate the need for fixed derivation paths for
+specific script types, many software wallets and hardware signers still use seed backups which
+lack derivation path and script information. Thus we largely use the same approach used in BIPs
+[[bip-0049.mediawiki|49]] and [[bip-0084.mediawiki|84]] for ease of implementation.
+
+==Specifications==
+
+This BIP defines the two needed steps to derive multiple deterministic addresses based on a
+[[bip-0032.mediawiki|BIP 32]] master private key.
+
+===Public key derivation===
+
+To derive a public key from the root account, this BIP uses the same account-structure as
+defined in BIPs [[bip-0044.mediawiki|44]], [[bip-0049.mediawiki|49]], and [[bip-0084.mediawiki|84]],
+but with a different purpose value for the script type.
+
+<pre>
+m / purpose' / coin_type' / account' / change / address_index
+</pre>
+
+For the <tt>purpose</tt>-path level it uses <tt>86'</tt>.
+The rest of the levels are used as defined in BIPs 44, 49, and 84.
+
+A key derived with this derivation path pattern will be referred to as <tt>derived_key</tt> further
+in this document.
+
+===Address derivation===
+
+
+[[bip-0341.mediawiki#cite_ref-22-0|BIP 341]] states: "If the spending conditions do not require a
+script path, the output key should commit to an unspendable script path instead of having no
+script path. This can be achieved by computing the output key point as
+''Q = P + int(hash<sub>TapTweak</sub>(bytes(P)))G''." Thus:
+
+<pre>
+internal_key:       lift_x(derived_key)
+32_byte_output_key: internal_key + int(HashTapTweak(bytes(internal_key)))G
+</pre>
+
+In a transaction, the scripts and witnesses are as defined in
+[[bip-0341.mediawiki#specification|BIP 341]]:
+
+<pre>
+witness:      <signature>
+scriptSig:    (empty)
+scriptPubKey: 1 <32_byte_output_key>
+              (0x5120{32_byte_output_key})
+</pre>
+
+==Backwards Compatibility==
+
+This BIP is not backwards compatible by design.
+An incompatible wallet will not discover these accounts at all and the user will notice that
+something is wrong.
+
+However this BIP uses the same method used in BIPs 44, 49, and 84, so it should not be difficult
+to implement.
+
+==Test vectors==
+
+<pre>
+mnemonic = abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about
+rootpriv = xprv9s21ZrQH143K3GJpoapnV8SFfukcVBSfeCficPSGfubmSFDxo1kuHnLisriDvSnRRuL2Qrg5ggqHKNVpxR86QEC8w35uxmGoggxtQTPvfUu
+rootpub  = xpub661MyMwAqRbcFkPHucMnrGNzDwb6teAX1RbKQmqtEF8kK3Z7LZ59qafCjB9eCRLiTVG3uxBxgKvRgbubRhqSKXnGGb1aoaqLrpMBDrVxga8
+
+// Account 0, root = m/86'/0'/0'
+xprv = xprv9xgqHN7yz9MwCkxsBPN5qetuNdQSUttZNKw1dcYTV4mkaAFiBVGQziHs3NRSWMkCzvgjEe3n9xV8oYywvM8at9yRqyaZVz6TYYhX98VjsUk
+xpub = xpub6BgBgsespWvERF3LHQu6CnqdvfEvtMcQjYrcRzx53QJjSxarj2afYWcLteoGVky7D3UKDP9QyrLprQ3VCECoY49yfdDEHGCtMMj92pReUsQ
+
+// Account 0, first receiving address = m/86'/0'/0'/0/0
+xprv         = xprvA449goEeU9okwCzzZaxiy475EQGQzBkc65su82nXEvcwzfSskb2hAt2WymrjyRL6kpbVTGL3cKtp9herYXSjjQ1j4stsXXiRF7kXkCacK3T
+xpub         = xpub6H3W6JmYJXN49h5TfcVjLC3onS6uPeUTTJoVvRC8oG9vsTn2J8LwigLzq5tHbrwAzH9DGo6ThGUdWsqce8dGfwHVBxSbixjDADGGdzF7t2B
+internal_key = cc8a4bc64d897bddc5fbc2f670f7a8ba0b386779106cf1223c6fc5d7cd6fc115
+output_key   = a60869f0dbcf1dc659c9cecbaf8050135ea9e8cdc487053f1dc6880949dc684c
+scriptPubKey = 5120a60869f0dbcf1dc659c9cecbaf8050135ea9e8cdc487053f1dc6880949dc684c
+address      = bc1p5cyxnuxmeuwuvkwfem96lqzszd02n6xdcjrs20cac6yqjjwudpxqkedrcr
+
+// Account 0, second receiving address = m/86'/0'/0'/0/1
+xprv         = xprvA449goEeU9okyiF1LmKiDaTgeXvmh87DVyRd35VPbsSop8n8uALpbtrUhUXByPFKK7C2yuqrB1FrhiDkEMC4RGmA5KTwsE1aB5jRu9zHsuQ
+xpub         = xpub6H3W6JmYJXN4CCKUSnriaiQRCZmG6aq4sCMDqTu1ACyngw7HShf59hAxYjXgKDuuHThVEUzdHrc3aXCr9kfvQvZPit5dnD3K9xVRBzjK3rX
+internal_key = 83dfe85a3151d2517290da461fe2815591ef69f2b18a2ce63f01697a8b313145
+output_key   = a82f29944d65b86ae6b5e5cc75e294ead6c59391a1edc5e016e3498c67fc7bbb
+scriptPubKey = 5120a82f29944d65b86ae6b5e5cc75e294ead6c59391a1edc5e016e3498c67fc7bbb
+address      = bc1p4qhjn9zdvkux4e44uhx8tc55attvtyu358kutcqkudyccelu0was9fqzwh
+
+// Account 0, first change address = m/86'/0'/0'/1/0
+xprv         = xprvA3Ln3Gt3aphvUgzgEDT8vE2cYqb4PjFfpmbiFKphxLg1FjXQpkAk5M1ZKDY15bmCAHA35jTiawbFuwGtbDZogKF1WfjwxML4gK7WfYW5JRP
+xpub         = xpub6GL8SnQwRCGDhB59LEz9HMyM6sRYoByXBzXK3iEKWgCz8XrZNHUzd9L3AUBELW5NzA7dEFvMas1F84TuPH3xqdUA5tumaGWFgihJzWytXe3
+internal_key = 399f1b2f4393f29a18c937859c5dd8a77350103157eb880f02e8c08214277cef
+output_key   = 882d74e5d0572d5a816cef0041a96b6c1de832f6f9676d9605c44d5e9a97d3dc
+scriptPubKey = 5120882d74e5d0572d5a816cef0041a96b6c1de832f6f9676d9605c44d5e9a97d3dc
+address      = bc1p3qkhfews2uk44qtvauqyr2ttdsw7svhkl9nkm9s9c3x4ax5h60wqwruhk7
+</pre>
+
+==Reference==
+
+* [[bip-0032.mediawiki|BIP32 - Hierarchical Deterministic Wallets]]
+* [[bip-0043.mediawiki|BIP43 - Purpose Field for Deterministic Wallets]]
+* [[bip-0044.mediawiki|BIP44 - Multi-Account Hierarchy for Deterministic Wallets]]
+* [[bip-0049.mediawiki|BIP49 - Derivation scheme for P2WPKH-nested-in-P2SH based accounts]]
+* [[bip-0084.mediawiki|BIP84 - Derivation scheme for P2WPKH based accounts]]
+* [[bip-0341.mediawiki|BIP341 - Taproot: SegWit version 1 spending rules]]
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