GapBitcoin HD Wallet Glossary
Plain-English definitions of every term you'll encounter when dealing with Bitcoin wallet recovery, gap limits, xpubs, UTXOs, and BIP standards.
Bech32 Address Format
A human-readable address format for native SegWit (P2WPKH) Bitcoin addresses, always starting with bc1q. Bech32 addresses are more efficient than legacy formats — they're lower-case, error-detecting, and produce smaller transactions with lower fees. Defined in BIP-173. Taproot uses a variant called Bech32m (addresses start with bc1p).
BIP (Bitcoin Improvement Proposal) Standard
A design document proposing new features, processes, or standards for Bitcoin. BIPs relevant to wallet recovery include BIP-32 (HD wallets), BIP-39 (mnemonic seed phrases), BIP-44 (multi-account hierarchy with the 20-address gap limit), BIP-49 (P2SH-P2WPKH), BIP-84 (P2WPKH / native segwit), and BIP-86 (Taproot / P2TR).
BIP-32 Standard
The Bitcoin Improvement Proposal that defines Hierarchical Deterministic (HD) wallets. BIP-32 specifies how to derive a tree of key pairs from a single master seed using a chain code and child key derivation function (CKD). This means a single seed phrase can generate billions of addresses, all recoverable from that one seed.
See also: HD Wallet, Derivation Path, xpub
BIP-39 Standard
The standard defining mnemonic seed phrases — the 12 or 24 human-readable words used to back up Bitcoin wallets. BIP-39 also defines an optional passphrase (sometimes called the "25th word") that combined with the mnemonic produces a completely different master key. Forgetting the passphrase means losing access to those funds entirely.
See also: Seed Phrase, Passphrase
BIP-44 Standard
The Bitcoin Improvement Proposal defining a multi-account hierarchy for HD wallets. BIP-44 specifies the derivation path structure m/purpose'/coin_type'/account'/change/index and — critically — establishes the default gap limit of 20. A wallet stops scanning for funds when it encounters 20 consecutive unused addresses. This is the primary cause of "missing" Bitcoin after wallet restores.
See also: Gap Limit, Derivation Path
Change Address Wallet Concept
When you send Bitcoin, your wallet spends an entire UTXO as input. If the UTXO is worth more than the amount you're sending, the difference (minus fees) is sent back to a new address in your own wallet — the change address. Change addresses are generated on the internal chain (m/1/*), separate from receive addresses on the external chain (m/0/*). The gap limit applies to both chains independently, so change address gaps can also hide UTXOs.
See also: UTXO, Internal Chain, Gap Limit
Child Key Cryptography
In BIP-32 HD wallets, a child key is any key derived from a parent key. Derivation takes the parent key, the chain code, and a child index number as inputs, producing a new key pair. Each child key can itself become a parent, creating the key tree structure. Hardened child keys (marked with ' in paths) use the private key for derivation and cannot be derived from an xpub alone.
Coin Control Feature
A wallet feature that lets you manually select which UTXOs (specific coins) to spend in a transaction. Available in Electrum, Sparrow, and Wasabi. Useful for privacy (avoiding address linking), fee optimization, and managing dust UTXOs after recovery.
Derivation Path Technical
The hierarchical address in the BIP-32 key tree specifying how to derive a particular key from the master seed. Format: m/purpose'/coin_type'/account'/change/index. Example: m/84'/0'/0'/0/5 means BIP-84 (native segwit), Bitcoin mainnet, account 0, external chain, address index 5. The apostrophe (') indicates hardened derivation. Different BIP standards use different purpose values: 44 (legacy), 49 (wrapped segwit), 84 (native segwit), 86 (taproot).
Dust Bitcoin Concept
A very small amount of Bitcoin considered "dust" because the transaction fee required to spend it exceeds or approaches its value. The Bitcoin network enforces minimum output amounts: 294 satoshis for native segwit (bech32) and Taproot addresses, 546 satoshis for legacy (P2PKH) and wrapped segwit (P2SH) addresses. In the context of the gap limit fix, "sending dust" means intentionally sending exactly these minimum amounts to empty gap addresses to give them transaction history, allowing the wallet to scan past them.
Dust Fix Recovery Method
The standard method for recovering Bitcoin hidden beyond the gap limit. It involves sending the minimum non-dust amount (294–546 satoshis) to each empty address inside the gap, giving those addresses transaction history. Once filled, the wallet scanner recognizes them as "used" and continues scanning past them, discovering the funded addresses beyond. GapFix identifies exactly which addresses need dust and exports the list for batch sending.
External Chain Technical
In BIP-32/BIP-44, the external chain (derived at path m/.../0/*) contains the receive addresses you share with others. Each time you request a payment, your wallet gives the payer the next unused address on the external chain. The gap limit applies to this chain — most gap limit problems involve the external chain.
See also: Internal Chain, Gap Limit
Gap Limit Core Concept
The number of consecutive unused addresses a Bitcoin HD wallet will scan before it stops looking for funds. The BIP-44 default is 20. When a wallet encounters 20 addresses in a row with no transaction history, it assumes there are no more funds and stops. If Bitcoin sits at an address with index greater than the last used index + 20, the wallet shows a zero balance even though the funds are safely on-chain. This is the core problem GapFix solves.
HD Wallet (Hierarchical Deterministic Wallet) Wallet Type
A Bitcoin wallet that generates all its keys from a single master seed using the BIP-32 derivation algorithm. HD wallets can restore the entire wallet (all addresses and funds) from a single 12 or 24-word seed phrase. All modern Bitcoin wallets are HD wallets: Ledger, Trezor, Electrum, Sparrow, Coldcard, BlueWallet, etc. The address gap limit is a property of HD wallet scanning.
See also: BIP-32, Seed Phrase, Gap Limit
Hardened Derivation Technical
A mode of BIP-32 key derivation that uses the private key (not the public key) as input. Hardened child keys (indicated by ' or h in derivation paths) cannot be derived from an xpub — they require the full private key or seed. The purpose, coin_type, and account levels of a BIP-44 path are typically hardened (m/84'/0'/0'), while the change and address_index levels are not.
Internal Chain Technical
In BIP-32/BIP-44, the internal chain (path m/.../1/*) contains change addresses — addresses used by the wallet to receive change from transactions. These are never shared publicly. The gap limit applies independently to the internal chain. Change address gap issues can occur after many transactions in a wallet.
See also: External Chain, Change Address
Master Key Cryptography
The root key in a BIP-32 HD wallet, derived directly from the seed phrase. The master private key (m) is the starting point for all derivations. The corresponding master public key can be used to derive xpubs at any path. Most wallets expose the account-level xpub (e.g., at m/84'/0'/0') rather than the true master xpub, which would expose all accounts across all coins.
Mnemonic Phrase Synonym
Another name for a seed phrase or recovery phrase — the 12 or 24 words used to back up a Bitcoin wallet. The word "mnemonic" means memory aid. Defined in BIP-39.
See also: Seed Phrase
Multisig (Multi-Signature) Wallet Type
A Bitcoin wallet requiring M-of-N private key signatures to authorize a transaction (e.g., 2-of-3). Each cosigner has its own xpub. For GapFix scanning, you'd typically scan the individual xpubs; the gap limit issue can affect any of the cosigner keys independently.
Passphrase (BIP-39 Passphrase / "25th Word") Security
An optional extra password added to a BIP-39 seed phrase during wallet setup. It combines with the 12/24 seed words to produce a completely different master key — and therefore a completely different set of addresses. If you used a passphrase and forget it, the funds are inaccessible (even with the seed words). When recovering a wallet, you must use the same passphrase you originally set.
See also: BIP-39, Seed Phrase
P2PKH (Pay-to-Public-Key-Hash) Address Type
The original ("legacy") Bitcoin address type, generating addresses starting with 1. Defined in BIP-44. Higher transaction fees than SegWit or Taproot formats. The corresponding extended public key prefix is xpub.
P2SH-P2WPKH (Wrapped SegWit) Address Type
A Bitcoin address type that wraps a native SegWit script in a P2SH envelope for backward compatibility. Generates addresses starting with 3. Defined in BIP-49. More efficient than P2PKH but less so than native segwit. The corresponding xpub prefix is ypub.
P2WPKH (Native SegWit / bech32) Address Type
Native SegWit address type generating addresses starting with bc1q. Defined in BIP-84. More transaction-fee-efficient than legacy or wrapped segwit. Minimum dust amount: 294 satoshis. The corresponding xpub prefix is zpub.
P2TR (Taproot) Address Type
The newest Bitcoin address type, generating addresses starting with bc1p. Defined in BIP-86. Uses Schnorr signatures for improved privacy and efficiency. Minimum dust amount: 294 satoshis. GapFix scans Taproot addresses automatically alongside the other three formats.
See also: Taproot
PSBT (Partially Signed Bitcoin Transaction) Protocol
A Bitcoin transaction format (BIP-174) that allows multiple parties to collaboratively sign a transaction without sharing private keys directly. Essential for hardware wallet workflows — the transaction is constructed by software, exported as a PSBT, signed on the hardware device (like Coldcard or Ledger), and then broadcast. Sparrow Wallet has excellent PSBT support for recovery scenarios.
Satoshi (sat) Unit
The smallest unit of Bitcoin: 1 BTC = 100,000,000 satoshis (1 sat = 0.00000001 BTC). Dust amounts for the gap limit fix are expressed in satoshis: 294 sats for native segwit/taproot, 546 sats for legacy/wrapped segwit.
Seed Phrase (Recovery Phrase) Security
The 12 or 24 human-readable words (from the BIP-39 wordlist) used to back up and restore a Bitcoin wallet. Your seed phrase is derived from entropy, encoded as words, and can regenerate your entire wallet's key tree. Never share your seed phrase with anyone. Tools like GapFix only require your xpub (public key) — never your seed phrase.
See also: BIP-39, Passphrase, xpub
SegWit (Segregated Witness) Protocol Upgrade
A 2017 Bitcoin protocol upgrade that separated ("segregated") the transaction signature data ("witness") from the transaction body. SegWit addresses are more space-efficient, resulting in lower fees. Includes two variants: wrapped SegWit (P2SH-P2WPKH, addresses starting with 3) and native SegWit (P2WPKH / bech32, addresses starting with bc1q).
Taproot Protocol Upgrade
A 2021 Bitcoin protocol upgrade (BIP-340/341/342) enabling Schnorr signatures and Merkelized Script Trees. Taproot addresses start with bc1p (Bech32m format). Minimum dust: 294 satoshis. GapFix derives and scans Taproot (P2TR, BIP-86) addresses automatically alongside legacy, wrapped segwit, and native segwit.
UTXO (Unspent Transaction Output) Core Concept
The fundamental unit of Bitcoin balance. Every time someone sends you Bitcoin, the transaction creates an output locked to your address — an Unspent Transaction Output. Your wallet's displayed balance is the sum of all UTXOs locked to addresses it controls. When UTXOs sit at addresses beyond the gap limit, the wallet can't see them, resulting in a lower-than-expected balance. The Bitcoin is safe on-chain — the wallet just hasn't found it.
See also: Full Guide: UTXO Recovery
Watch-Only Wallet Wallet Type
A wallet that tracks balances and transactions for a set of addresses without holding the private keys. Useful for monitoring a hardware wallet's balance from a desktop app. You can import an xpub into Electrum or Sparrow as a watch-only wallet to scan addresses without having the device connected.
See also: xpub
xpub (Extended Public Key) Core Concept
A BIP-32 extended public key that can derive an entire sequence of public keys (and therefore Bitcoin addresses) without exposing any private key. The prefix xpub specifically denotes legacy P2PKH addresses (BIP-44). For wrapped segwit wallets the prefix is ypub; for native segwit it's zpub. Pasting your xpub into GapFix is safe — the key cannot spend funds.
See also: Full Guide: xpub Explained, ypub, zpub
ypub Key Type
An extended public key for wrapped SegWit (P2SH-P2WPKH, BIP-49) wallets. Derives addresses starting with 3. Used by some wallets (notably Ledger) as the default account key type. GapFix accepts ypub and scans all four address formats automatically.
zpub Key Type
An extended public key for native SegWit (P2WPKH / bech32, BIP-84) wallets. Derives addresses starting with bc1q. The most common modern wallet format. Electrum, Sparrow, and BlueWallet typically expose a zpub for native segwit accounts. GapFix accepts zpub and scans all four address formats automatically.