We Never See Nothing

What the hell!? Just got my first cold card so I am learning tons of new shit.

We are strongly encouraged to use a new receive address every time. But how does one not run afoul of the dreaded “gap limit?”

Simple. Don’t let multiple sources derive wallet addresses. If you have watch-only wallets, they could be deriving addresses beyond the gap limit from the “HOME” wallet. This could lead to addresses bearing btc not being detected when using the home wallet, and from what I am reading, access to those addresses could get very difficult.

So should we actually encourage using the same address over and over again, to be sure we aren’t getting screwed up by the gap limit? Better to reuse an address than generate an address from a non-home wallet.

Similar to the Gap limit, in the realm of generating receive addresses: ColdCard even has concerns about strange or custom derivation of new addresses by other wallets. This goes a step further from the gap limit in potentially complicating your future bitcoin access. Because your main wallet may not recognize the derivation pattern of those addresses and you won’t have access. Main point: use the same wallet to derive/verify receive addresses that will be ultimately doing outgoing transactions.

Correct me if i am wrong in the comments, thanks.

Cold Card website citation:

Although the subkey derivation will be correct, and we have researched the BIP32 derivation paths in use by these popular systems, we make no guarantees about what they are using at present, and some are configurable.

Do not make deposits to these payment addresses without confirming they match the wallet in question, and in general, please only use addresses produced by the wallet which will be responsible for tracking the UTXO on the blockchain. These can be verified using the “Address Explorer”, found on the Advanced menu.

LEDGER website citation:

Address gap limit The address gap limit refers to the standard number of public addresses that are checked for transactions in the blockchain in order to calculate an account’s balance. Transactions received on an address beyond the address gap limit are not detected. This can only happen when using an external wallet to derive addresses.”

Address gap limit example

If you receive a transaction on the first address, address 1, Ledger Live will scan addresses 2 to 21 for any additional transaction history. If nothing is found, it will stop looking. If address 22 has received, Ledger Live will not see it because it stopped at address 21.