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Home Glossary D DUKPT (Derived Unique Key Per Transaction)

DUKPT (Derived Unique Key Per Transaction)

A payment security method generating new encryption keys per transaction; sometimes adapted for hardware wallet cryptographic flows.
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DUKPT is widely used in traditional payment terminals: each swipe or tap transaction generates a fresh key, reducing the damage if a single key is compromised. In the Bitcoin world, some hardware wallets or specialized payment systems explore applying a similar principle—each transaction step uses a unique derived key.

This approach can reduce the risk of replay or key reuse attacks, ensuring that compromised keys don’t jeopardize all past and future transactions. Implementation, however, can be non-trivial and might require additional hardware or firmware capabilities. Still, as Bitcoin usage broadens, incorporating tried-and-true payment industry security standards remains a fascinating intersection of old and new finance.

Key takeaways
Rotates cryptographic keys on a per-transaction basis
Minimizes the impact of key compromise
Adopted from mainstream payment security for potential Bitcoin use
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