A Type 1 deterministic walletwallet - Software that stores private keys and monitors the block chain (sometimes as a client of a server that does the processing) to allow users to spend and receive duffs. is the simpler of the two, which can create a single series of keys from a single seed. A primary weakness is that if the seed is leaked, all funds are compromised, and wallet sharing is extremely limited.
For an overview of the HD walletHD wallet - The Hierarchical Deterministic (HD) key creation and transfer protocol (BIP32), which allows creating child keys from parent keys in a hierarchy. Wallets using the HD protocol are called HD wallets., please see the developer guide section. For details, please see BIP32.
Updated about a year ago