The BIP‑138 announced by the Bitcoin development community officially registers a new technology aimed at solving the recovery problem caused by the complex structure of virtual asset wallets. The proposal seeks to enhance both the security and usability of multi‑signature wallets that had previously been difficult to recover with only a single secret.
BIP‑138 proposes backing up core metadata in an encrypted file format. By doing so, private key information can be completely removed, and only users who possess the extended public key (xpub) can decrypt the file to verify the wallet structure. In other words, even when recovery is difficult using just a single secret, the stored metadata allows one to inspect the transaction history of the wallet and the public‑key information of joint signers.
However, this proposal also carries security risks. If the backup target wallet already knows an extended public key, securing an encrypted file could expose internal metadata. Although it does not directly lead to theft, a vulnerability remains in which transaction histories can be traced. The research team at Bitcoin Light CryptoSlate editorial noted that while the proposal attempts to overcome limitations of multi‑signature wallets that were hard to recover with only one secret, it also contains a weakness that third parties possessing an extended public key could potentially access information.
BIP‑138 is currently in a preliminary stage and will be decided upon further technical validation and developer community discussions. The proposal’s potential to improve both the security and usability of virtual asset wallets is noted.