Part 3/7:
Ben highlights an emerging feature that integrates password management into the Coldcard ecosystem, aiming to bolster security across digital life. Users can input existing passwords or generate random ones directly on the device, utilizing its built-in entropy source. The standout feature here is BIP-85, a standard for hierarchical deterministic key derivation.
Using BIP-85, a user’s seed phrase (the 12 or 24-word recovery phrase) can serve as a master key to generate up to 10,000 derived keys. These can be used for a variety of purposes, including creating unique, strong passwords for different websites and services. Each password is generated from an "account number," which can be easily retrieved later.