[BIP Proposal] Standard Encrypted Wallet Payload + Standard Encryption Envelope formats

The first proposal, titled Standard Encrypted Wallet Payload, introduces a CBOR-based format designed for serializing wallet data. This encompasses descriptor-based accounts, optional transactions/UTXOs, metadata, and root secrets. A notable feature of this proposal is its separation of the core data structure from cryptographic protection, requiring encryption as per a companion standard. This initiative builds upon previous BIPs (329, 380, 388, and 389) by focusing on extensibility and deterministic encoding, ensuring that wallets can be reliably restored across different platforms. The draft for this proposal is available for review at this link.

The second proposal, known as the Standard Wallet Encryption Envelope, proposes a secure and versioned container for the encrypted wallet payload. It utilizes a password-derived key with Argon2id for encryption, with considerations for future enhancements such as asymmetric encryption methods. This approach aims to offer robust protection while maintaining modularity and compatibility with various libraries. The draft for the encryption envelope can be examined at this link.

Both drafts are in their nascent stages and seek constructive feedback regarding their overall approach, technical specifics, identification of potential gaps, and suggestions for improvement. The goal is to refine these proposals through community input before advancing them further or submitting PRs to the BIP repository. These efforts represent a pivotal step towards achieving a standardized, secure, and interoperable framework for wallet backups and transfers within the Bitcoin ecosystem.