Now if you’re complying with best practices and generating a new public and private key for every transaction you make, the natural question is: how do I manage an increasing number of keys? This is especially the case if you’re making frequent transactions.
The number of keys you control can quickly become overwhelming.
The traditional way to keep track of keys was through what are known as JBOK wallets, where JBOK is an acronym standing for “Just a Bunch of Keys.” The idea behind JBOK wallets was that after making every transaction, you would make a new backup of the new key pair you generate.
Alternatively, you could also start off with a bunch of keys generated beforehand.
However, after you use up all of these keys, you would still have the same issue of having to generate more keys.
JBOK wallets aren’t too convenient because you have to store each and every key pair.
Consider if you’re an exchange, and you have thousands of users trading constantly.
You’d have to deal with so many keys, and even more back ups.
That’d be pretty unmanageable.