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I saw there are different types of derivation path in ledger live. One is 44'/1729'/0'/0'. Another one is 44'/1729'/1'/0'. What does the third slot mean? What does each slot mean? Ledger live seems to only have one type of account, so I wonder when ledger live uses the third slot. They don’t seem to have a rule to pick between third slot and fourth slot.

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The third slot (level) of the derivation path is an incrementation index. For more details, see bip-0044. More specifically, the third level discriminates different accounts. This allow a wallet to generate discriminate keys for different purposes (consider e.g. a checking account, a savings account, ...). You can read more here.

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  • Thank you for your answer, but ledger live seems to only have one type of account, so I wonder when ledger live uses the third slot. They don’t seem to have a rule to pick between third slot and fourth slot
    – user5867
    May 20 at 6:51
  • If a path is Slot1/Slot2/Slot3/Slot4 , then all slots are "used" in the sense that they appear in the path. The difference between your two paths is the index used for the third slot, whereas the fourth slot is set to zero. The fourth slot is used to distinguish internal / external keys, which is explained in more detail in the bip-0044 standard. I haven't used ledger live myself, so I can't really tell. Perhaps try with the ledger support?
    – arvidj
    May 20 at 7:08
  • I guess one could view as these two being possibly different types of account. Thank you for your reply.
    – user5867
    May 21 at 4:20

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