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We define the following 5 levels in BIP32 path:
m / purpose' / coin_type' / account' / change / address_index
Coin type
One master node (seed) can be used for unlimited number of independent cryptocoins such as Bitcoin, Litecoin or Namecoin. However, sharing the same space for various cryptocoins has some disadvantages.
This level creates a separate subtree for every cryptocoin, avoiding reusing addresses across cryptocoins and improving privacy issues.
Coin type is a constant, set for each cryptocoin. Cryptocoin developers may ask for registering unused number for their project.
The list of already allocated coin types is in the chapter "Registered coin types" below.
Hardened derivation is used at this level.
m / purpose' / coin_type' / account' / change / address_index
Coin type
One master node (seed) can be used for unlimited number of independent cryptocoins such as Bitcoin, Litecoin or Namecoin. However, sharing the same space for various cryptocoins has some disadvantages.
This level creates a separate subtree for every cryptocoin, avoiding reusing addresses across cryptocoins and improving privacy issues.
Coin type is a constant, set for each cryptocoin. Cryptocoin developers may ask for registering unused number for their project.
The list of already allocated coin types is in the chapter "Registered coin types" below.
Hardened derivation is used at this level.
For the exact implementation of the Nano S you should take a look at the Ledger documentation.
