Address Gap Limit
The address gap limit is the number of consecutive unused addresses a wallet scans before it stops looking for funds; the common default is 20.
What Is Address Gap Limit?
The address gap limit is the number of consecutive unused addresses a wallet checks before it stops looking for more funds. BIP44 sets the common default at 20: when a wallet scans an account and finds 20 addresses in a row with no transaction history, it assumes nothing lies beyond them.
The rule exists because a seed can produce a practically unlimited number of addresses, and a wallet restoring from a seed has no list of which ones were used. Scanning until a gap of unused addresses appears is how it finds the balance without searching forever.
Problems arise when more addresses were handed out than were paid. If addresses 0 to 30 were given to customers and only number 30 received coins, a freshly restored wallet stops at number 19 and shows a lower balance, or none. The coins are still on the blockchain and still controlled by the seed.
The scan is done by the companion or coordinator app, not by the hardware wallet, so the fix is in the software: raise the gap limit in applications that allow it, such as Sparrow or Electrum, or generate addresses until the missing ones are covered. Reusing addresses to avoid gaps is a poor trade, since it harms privacy.
BIP44 is a standard for deriving cryptocurrency wallet keys using a hierarchical structure, allowing for multiple accounts and addresses within a single wallet.
Read full definition: BIP44A blockchain is a shared, append-only record of transactions kept by many independent computers, so no single party can rewrite it.
Read full definition: BlockchainA hardware wallet is a dedicated device that keeps private keys offline and signs transactions internally, so the keys never reach an internet-connected computer or phone.
Sparrow Wallet is a desktop Bitcoin wallet that focuses on security, privacy, and advanced features for managing Bitcoin transactions and keys.
Read full definition: Sparrow WalletElectrum is a lightweight Bitcoin wallet that allows users to store, send, and receive Bitcoin securely. It is known for its speed and low resource usage.
Read full definition: ElectrumReal-World Examples
Example 1: A shop creates a new address for every invoice, and many invoices are never paid. After the owner restores the wallet on a new device, some payments are missing until the gap limit is raised.
Example 2: A user restores a seed in Sparrow and sees less bitcoin than expected. Raising the gap limit from 20 to 100 in the wallet settings makes Sparrow scan further, and the full balance appears.
Sparrow Wallet is a desktop Bitcoin wallet that focuses on security, privacy, and advanced features for managing Bitcoin transactions and keys.
Read full definition: Sparrow WalletBitcoin (BTC) is the first decentralized cryptocurrency, launched in 2009. It uses blockchain technology for secure, peer-to-peer digital transactions without intermediaries.
Read full definition: BitcoinFrequently Asked Questions
Why does my restored wallet show a lower balance than expected?
Often the wallet stopped scanning too early. If more addresses were handed out than were paid, a run of unused addresses longer than the gap limit, commonly 20, makes the wallet assume nothing lies beyond it. The coins are still on the blockchain and still controlled by the seed; raising the gap limit in the companion app makes the wallet scan further.
Do I change the gap limit on the hardware wallet itself?
No. The scan is done by the companion or coordinator app, not by the hardware wallet, so the fix is in the software. Applications that allow it, such as Sparrow or Electrum, let you raise the gap limit, for example from 20 to 100. Alternatively, generate addresses in the app until the missing ones are covered.
Should I reuse addresses to avoid gap-limit problems?
It avoids gaps but is a poor trade, because reusing addresses harms privacy. Gap problems mainly appear when many addresses are handed out and never paid, for example invoices that remain unpaid. Raising the gap limit in the app after a restore solves this while you keep using a fresh address for each payment.
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