bips/bip-0138.md

  BIP: 138
  Layer: Applications
  Title: Compact encryption scheme for non-seed wallet data
  Authors: Pyth <pythcoiner@wizardsardine.com>
  Status: Draft
  Type: Specification
  Assigned: 2026-05-11
  License: BSD-2-Clause
  Discussion: https://delvingbitcoin.org/t/a-simple-backup-scheme-for-wallet-accounts/1607
              https://groups.google.com/g/bitcoindev/c/5NgJbpVDgEc/m/TtGK9sF9BgAJ

Introduction

Abstract

This BIP defines a compact encryption scheme for output script descriptors (BIP-0380), wallet policies (BIP-0388), labels (BIP-0329), and wallet backup metadata (BIP-0139). The payload must not contain any private key material.

Users can store encrypted backups on untrusted media or cloud services without leaking addresses, script structures, or cosigner counts. The encryption key derives from the lexicographically-sorted public keys in the descriptor, allowing any keyholder to decrypt without additional secrets.

Though designed for descriptors and policies, the scheme works equally well for labels and backup metadata.

Copyright

This BIP is licensed under the BSD 2-Clause License.
Redistribution and use in source and binary forms, with or without modification, are permitted provided that the above copyright notice and this permission notice appear in all copies.

Motivation

Losing the wallet descriptor (or wallet policy) is just as catastrophic as losing the seed itself. The seed lets you sign, but the descriptor maps you to your coins. For multisig or miniscript wallets, keys alone won't help: without the descriptor, you can't reconstruct the script.

Offline storage of descriptors has two practical obstacles:

1. Descriptors are hard to store offline.
   Descriptors can be much longer than a 12/24-word seed. Paper and steel backups become impractical or error-prone.

2. Online redundancy carries privacy risk.
   USB drives, phones, and cloud storage solve the length problem but expose your wallet structure. Plaintext descriptors leak your pubkeys and script details. Cloud storage is often unencrypted, and even cloud encryption could be compromised, depending on (often opaque) implementation details. Its security also reduces to that of the weakest device with cloud access. Each copy increases the attack surface.

This BIP therefore proposes an encrypted, compact backup format that:

• can be safely stored in multiple places, including untrusted online services,
• can be decrypted only by intended holders of specified public keys,

See the original Delving post for more background.

Expected properties

• Encrypted: safe to store with untrusted cloud providers or backup services
• Access controlled: only designated cosigners can decrypt
• Easy to implement: it should not require any sophisticated tools/libraries.
• Vendor-neutral: works with any hardware signer

Scope

This proposal targets output script descriptors (BIP-0380) and policies (BIP-0388), but the scheme also works for labels (BIP-0329) and other wallet metadata like wallet backup metadata (BIP-0139).

Private key material MUST be removed before encrypting any payload.

Specification

Note: in the followings sections, the operator ⊕ refers to the bitwise XOR operation.

Secret generation

• Let p_1, p_2, \dots, p_n, be the public keys in the descriptor/wallet policy, in increasing lexicographical order. The scheme is defined for any n \geq 1, in particular it supports single-signature descriptors (n = 1). Each p_i is the x-only-normalized root public key of one allowed key expression (see Descriptor key requirements).
• Let s = sha256(sha256("BIP138_DECRYPTION_SECRET") | sha256("BIP138_DECRYPTION_SECRET") | p_1 | p_2 | ... | p_n)
• Let s_i = sha256(sha256("BIP138_INDIVIDUAL_SECRET") | sha256("BIP138_INDIVIDUAL_SECRET") | p_i)
• Let c_i = s ⊕ s_i

Because s and s_i use distinct domain-separation tags, s \neq s_i and therefore c_i is never the all-zero string.

Note: To prevent attackers from decrypting the backup using publicly known keys, explicitly exclude any public keys with x coordinate 50929b74c1a04954b78b4b6035e97a5e078a5a0f28ec96d547bfee9ace803ac0 (the BIP341 NUMS point, used as a taproot internal key in some applications). Additionally, exclude any other publicly known keys.

Applications that exclude additional keys SHOULD document this, although decryption using these keys will simply fail. This does not affect decryption with the remaining keys.

Descriptor key requirements

Only key expressions of the extended-public-key type with a trailing derivation step or wildcard contribute to \{p_1, \dots, p_n\}. Without that derivation, the xpub's root pubkey, used to seed s, would also be the on-chain pubkey of every spend, so observing one spend would let anyone recompute s and decrypt the backup.¹ The rule generalizes to any network prefix (xpub/tpub/Vpub/...).

Allowed forms (origin information [...] is optional and orthogonal):

Form	Example
<xpub>/<path> (fixed derivation, no wildcard)	xpub.../0/5
<xpub>/* (wildcard only)	xpub.../*
<xpub>/<path>/* (fixed derivation followed by a wildcard)	xpub.../0/*
<xpub>/<a;b;...> (multipath, no wildcard)	xpub.../<0;1>
<xpub>/<a;b;...>/* (multipath followed by a wildcard)	xpub.../<0;1>/*

Implementations:

• MUST exclude every other form (literal pubkeys, bare xpubs, ...) from \{p_1, \dots, p_n\}.
• MUST refuse to encode a backup if the resulting set is empty.
• SHOULD make the user aware of each excluded expression, since the cosigner holding that key will be unable to decrypt the backup with their key.

Key Normalization

For each allowed expression, take the root extended public key (ignoring origin information, the trailing derivation path, the wildcard, and any multipath specifiers) and extract its x-coordinate. The result is the 32-byte x-only public key p_i.²

Encryption

The format uses CHACHA20_POLY1305 (RFC 8439) as the encryption algorithm, with a 96-bit random nonce and a 128-bit authentication tag to provide confidentiality and integrity.

• let nonce = random(96 bits)
• let ciphertext = encrypt(payload, secret, nonce)

The nonce MUST NOT be all zero. If the random source yields an all-zero nonce, the encoder MUST generate a new one.

Decryption

In order to decrypt the payload of a backup, the owner of a certain public key p computes:

• let s_i = sha256(sha256("BIP138_INDIVIDUAL_SECRET") ‖ sha256("BIP138_INDIVIDUAL_SECRET") ‖ p)
• for each individual_secret_i generate reconstructed_secret_i = individual_secret_i ⊕ si
• for each reconstructed_secret_i process payload = decrypt(ciphertext, secret, nonce)

Decryption will succeed if and only if p was one of the keys in the descriptor/wallet policy.

Encoding

The encrypted backup must be encoded as follows:

MAGIC VERSION DERIVATION_PATHS INDIVIDUAL_SECRETS ENCRYPTION ENCRYPTED_PAYLOAD

Magic

MAGIC: 6 bytes which are ASCII/UTF-8 representation of BIP138.

Version

VERSION: 1 byte unsigned integer representing the format version. The current specification defines version 0x01.

Derivation Paths

Note: the derivation-path vector should not contain duplicates. Derivation paths are optional; they can be useful to simplify the recovery process if one has used a non-common derivation path to derive his key.³

DERIVATION_PATH follows this format:

COUNT
CHILD_COUNT CHILD ... CHILD
...
CHILD_COUNT CHILD ... CHILD

COUNT: 1-byte unsigned integer (0–255) indicating how many derivation paths are included.
CHILD_COUNT: 1-byte unsigned integer (1–255) indicating how many children are in the current path.
CHILD: 4-byte big-endian unsigned integer representing a child index per BIP-32.

Individual Secrets

At least one individual secret must be supplied.⁴

The INDIVIDUAL_SECRETS section follows this format:

COUNT
INDIVIDUAL_SECRET
INDIVIDUAL_SECRET

COUNT: 1-byte unsigned integer (1–255) indicating how many secrets are included.
INDIVIDUAL_SECRET: 32-byte serialization of the derived individual secret.

Note: the individual secrets vector should not contain duplicates. Implementations MAY deduplicate secrets during encoding or parsing.

Encryption

ENCRYPTION: 1-byte unsigned integer identifying the encryption algorithm.

Value	Definition
0x00	Reserved
0x01	CHACHA20_POLY1305

Payload Size Limits

CHACHA20_POLY1305 (per RFC 8439) supports plaintext up to 2^38 - 64 bytes. Implementations MAY impose stricter limits based on platform constraints (e.g., limiting to 2^32 - 1 bytes on 32-bit architectures).

Implementations MUST reject empty payloads.

Ciphertext

CIPHERTEXT is the encrypted data resulting from encryption of PAYLOAD with algorithm defined in ENCRYPTION where PAYLOAD is encoded following this format:

CONTENT LENGTH PLAINTEXT (CONTENT LENGTH PLAINTEXT ...) (PADDING)

LENGTH: variable-length integer representing the length of PLAINTEXT in bytes. It MUST be present.

PLAINTEXT: the LENGTH bytes of payload data.

PADDING: OPTIONAL bytes after the final PLAINTEXT, up to the end of the decrypted PAYLOAD. Parsers MUST consume exactly LENGTH bytes of each PLAINTEXT. The padding bytes are reserved for size padding (see Padding) and/or vendor-specific data, the same way trailing bytes after CIPHERTEXT are reserved and ignored.

Padding

Backups that are updated over time can leak information through their size even when the contents are encrypted. A wallet that uploads a new backup after every received transaction can reveal activity to the storage provider through changing payload sizes. This is relevant for mutable payloads such as BIP-329 or BIP-0139.⁵

Padding is OPTIONAL and is an encoder concern only: decoders ignore the PADDING bytes and MUST NOT validate any bucket. Because the padding sits inside CIPHERTEXT, the ENCRYPTED_PAYLOAD LENGTH reveals only the padded size, not the real PLAINTEXT size.

Encoders that pad SHOULD zero-fill PAYLOAD up to the smallest bucket S_n that fits it, with S_0 = 10240 (10 KiB) and S_n = floor(S_0 * (5 / 4)^n). Payloads of 10 KiB or less are padded to 10 KiB. This keeps padding overhead under 25% above the smallest fitting bucket while coarsening the observable size. Padding is RECOMMENDED for mutable payloads and unnecessary for static ones such as BIP-380 descriptors and BIP-388 wallet policies.

Integer Encodings

All variable-length integers are encoded as compact size.

Content

CONTENT is a variable length field defining the type of the PLAINTEXT that follows it. It follows this format:

TYPE (LENGTH) DATA

A PAYLOAD carries one or more CONTENT LENGTH PLAINTEXT items, each CONTENT describing the PLAINTEXT immediately following it. The sequence ends at the first TYPE byte equal to 0x00, or at the end of the PAYLOAD, whichever comes first; all remaining bytes are PADDING. A PAYLOAD MUST contain at least one item (see Payload Size Limits).

TYPE: 1-byte unsigned integer identifying how to interpret DATA.

Value	Definition
0x00	Reserved
0x01	BIP Number (big-endian uint16)
0x02	Vendor-Specific Opaque Tag

LENGTH: variable-length integer representing the length of DATA in bytes.

For all TYPE values except 0x01, LENGTH MUST be present.

DATA: variable-length field whose encoding depends on TYPE.

For TYPE values defined above:

• 0x00: parsers MUST reject the payload.
• 0x01: LENGTH MUST be omitted and DATA is a 2-byte big-endian unsigned integer representing the BIP number that defines it.
• 0x02: DATA MUST be LENGTH bytes of opaque, vendor-specific data.

For all TYPE values except 0x01, parsers MUST reject CONTENT if LENGTH exceeds the remaining payload bytes.

For an unknown TYPE less than 0x80, parsers MUST consume its LENGTH bytes of DATA, treat the content type as unknown, consume the following payload LENGTH and PLAINTEXT, and continue with the next item.

For an unknown TYPE greater than or equal to 0x80, parsers MUST reject the payload.⁶

BIP380 Descriptor Backup Content

When CONTENT is TYPE = 0x01 with DATA = 0x017c (BIP380), PLAINTEXT is a UTF-8 BIP380 descriptor backup. It is either a single bare descriptor string, or a JSON descriptor backup document (for several descriptors) when the first character is {.

Test vectors are in bip380_descriptor_backup.json.

Descriptor strings MUST NOT contain private key material and SHOULD include a checksum.

JSON Descriptor Backup Documents

The descriptor backup document is a JSON object with the following fields:

• version: integer. This specification defines version 1.
• descriptor_sets: array of descriptor set objects.

Each descriptor set describes BIP380 output script descriptors belonging to one logical account or script family.

Descriptor Set Fields

descriptor is a required string containing a BIP380 output script descriptor.

For BIP389 multipath descriptors, /<0;1> means receive and change, respectively. The change_descriptor field MUST NOT be used.

For descriptors without BIP389 multipath key expressions, descriptor is the receive descriptor and change_descriptor is the change descriptor.

If optional boolean archived is true, importing wallets SHOULD NOT use the descriptor set for new address generation.

range is an optional two-element array [start, end], inclusive, describing the ranged derivation indexes covered by the descriptor set.

birth_time is an optional integer Unix timestamp in seconds, indicating a lower bound for when the descriptor set may have received funds. Importing wallets MAY use this value as a scanning hint.

BIP388 Wallet Policy Backup Content

When CONTENT is TYPE = 0x01 with DATA = 0x0184 (BIP388), PLAINTEXT is a UTF-8 JSON wallet policy backup document. A BIP388 wallet policy is a descriptor template plus a vector of key information items, as defined in BIP388.

Test vectors are in bip388.json.

The document is one of two forms:

• A single policy, a JSON object { "keys": [...], "policy": "<template>" }.
• Multiple policies, a JSON object { "version": 1, "policy_sets": [...] }.

Parsers select the form by structure: an object with a policy_sets field is the multiple form, an object with a policy field is the single form.

Policy Fields

keys is a required array of BIP388 key information items, each a serialized extended public key with optional key origin ([fingerprint/path]xpub). It MUST contain at least one key. Keys MUST NOT contain private key material.

policy is a required non-empty string containing a BIP388 wallet descriptor template, with @i key placeholders referring to keys.

Policy Set Fields

A policy set has the same keys and policy fields as the single form, plus the optional metadata fields:

If optional boolean archived is true, importing wallets SHOULD NOT use the policy for new address generation.

range is an optional two-element array [start, end], inclusive, describing the ranged derivation indexes covered by the policy.

birth_time is an optional integer Unix timestamp in seconds, indicating a lower bound for when the policy may have received funds. Importing wallets MAY use this value as a scanning hint.

Multiple Policies Document

The multiple form is a JSON object with the following fields:

• version: integer. This specification defines version 1.
• policy_sets: array of policy set objects.

Encrypted Payload

ENCRYPTED_PAYLOAD follows this format:

NONCE LENGTH CIPHERTEXT

NONCE: 12-byte (96-bit) nonce. Parsers MUST reject a backup whose NONCE is all zero. LENGTH: variable-length integer representing ciphertext length. CIPHERTEXT: variable-length ciphertext.

Note: CIPHERTEXT is followed by the end of the ENCRYPTED_PAYLOAD section.
Compliant parsers MUST stop reading after consuming LENGTH bytes of ciphertext; additional trailing bytes are reserved for vendor-specific extensions and MUST be ignored.

Text Representation

Implementations SHOULD encode and decode the backup using Base64 (RFC 4648).⁷

Rationale

See footnotes throughout the specification for design rationale.

Future Extensions

The version field enables possible future enhancements:

• Additional encryption algorithms
• Support for threshold-based decryption
• Hiding number of participants
• bech32m export

Implementation

• Rust implementation

Test Vectors

key_types.json contains test vectors for key serialisations.
content_type.json contains test vectors for contents types serialisations.
derivation_path.json contains test vectors for derivation paths serialisations.
individual_secrets.json contains test vectors for individual secrets serialization.
encryption_secret.json contains test vectors for generation of encryption secret.
chacha20poly1305_encryption.json contains test vectors for ciphertexts generated using CHACHA20-POLY1305. encrypted_backup.json contains test vectors for generation of complete encrypted backups, including BIP380 and BIP388 content, a multi-content payload, and an all-zero-nonce backup that parsers MUST reject.
bip380_descriptor_backup.json contains test vectors for BIP380 descriptor backup documents.
bip388.json contains test vectors for BIP388 wallet policy backup documents.

Acknowledgements

// TBD

---

1. Why require trailing derivation? Any trailing derivation step, or the implicit child derivation forced by a wildcard, breaks the identity between the xpub root pubkey and the on-chain pubkey. Fixed-derivation expressions like xpub.../0/5 are allowed because the on-chain key (xpub/0/5) already differs from the encryption seed (the xpub root). Literal pubkeys and bare xpubs are disallowed for the same reason: the literal value is exactly what goes on-chain, so s would become recoverable from a single observed spend. ↩︎

2. Why x-only keys? X-only public keys are 32 bytes, a natural size for cryptographic operations. This format is also used in BIP340 (Schnorr signatures) and BIP341 (Taproot). ↩︎

3. Why are derivation paths optional? When standard derivation paths are used, they are easily discoverable, making them straightforward to brute-force. Omitting them enhances privacy by reducing the information shared publicly about the descriptor scheme. ↩︎

4. Why no fingerprints in plaintext encoding? Including fingerprints would leak direct information about the descriptor participants, which compromises privacy. ↩︎

5. Why pad inside the ciphertext? Padding the encrypted payload, rather than appending bytes after the backup, hides the real payload size from anyone who parses the backup, not just from someone who measures the file size. The size field a parser sees is the padded LENGTH. ↩︎

6. Why the 0x80 threshold? The TYPE >= 0x80 rule keeps the encoding upgradeable. A future version can define a new content type at or above 0x80 that older parsers reject rather than misread, while types below 0x80 stay backward compatible. ↩︎

7. Why Base64? PSBT (BIP174) is commonly exchanged as a Base64 string, so wallet software likely already supports this representation. ↩︎