[BIP Proposal] Compressed Base58 Encoding for BIP-39 Mnemonics with Multisig Extensions

The discussion revolves around the utilization of descriptors, specifically BIP-38x, for addressing a certain use case within the realm of Bitcoin security and management. The suggestion put forth is to opt for a fully public descriptor incorporating all three xpubs/key paths while retaining one's master secret in codex32 format as outlined in BIP-93. This approach is highlighted as advantageous for several reasons. Firstly, it facilitates the wallet's recognition of the secret key corresponding to some of the xpubs by leveraging the BIP-380 key origin information, provided the master secret has been initially loaded into the wallet. This highlights an efficient method of integrating the master secret with the public descriptor within a wallet environment.

Furthermore, there is a clear distinction made between the storage requirements and sensitivities of the master secret and the public descriptor data. The master secret is described as compact and highly confidential, necessitating a robust error-correcting checksum, potentially complemented by secret sharing techniques for secure distribution of backup copies, such as through sealed metal capsules. In contrast, although descriptor data is considered sensitive, it does not require the same level of secrecy as the master secret. Given its potentially larger size, the application of error-correcting codes to descriptor data presents challenges. Therefore, different backup methods that are more conventional may be deemed suitable for descriptor data due to its lesser degree of secrecy.

The ongoing efforts to implement this strategy into Bitcoin Core are acknowledged, with a reference to a specific GitHub pull request (Bitcoin Core PR #32652), indicating that this initiative is a work in progress. This inclusion signifies an active pursuit within the Bitcoin development community to enhance security measures and management practices concerning Bitcoin keys and descriptors.