Questions about HD wallets

Ardor and Nxt Wallet Users
#1

If I use a seed to create multiple accounts, Im assuming I would have to use my alphanumeric private key to send transactions on Ardor Lite? Is that just as safe as using a 12 word passphrase? Entering the private key by hand is more of a challenge than a 12 word passphrase and its not good practice to store keys in the cloud for copy/paste. Do I have to grab the private key from within the ardor client each time?

Also I'm trying to understand the benefit of storing ARDR in multiple accounts. I could see the benefit in spreading coins into multiple accounts in the rare case that a hacker gets into 1/5 accounts instead of a single account that holds everything.

However in terms of privacy, if a user is buying ARDR on a kyc exchange, each time the user sends coins to a new ARDR account, those coins will always be able to be tracked back the account name on the exchange.

What is main advantage of having multiple accounts under a HD wallet? Seems like extra work to have multiple accounts for each transaction unless one is really worried about getting hacked. I must be unaware of other major use cases.

#2

The private key is essentially the same as the legacy secret phrase. Of course if you previously remembered the secret phrase that would be better than having to copy and paste the private key. Working with HD wallets would be always easier if the software supports the HD wallets directly, like the reference wallet. I don't remember right now what's the current support for HD wallets on Ardor Lite.

There are two main advantages for HD wallets. The first one is when you use a hardware wallet. Hardware wallets are HD wallets that keep the seed and derived private keys inside the device and just sign the transactions internally. That means than any malicious software on your computer or some rogue website could not stole your seed or private key.

Even if you don't have a hardware wallet we've implemented a software version of an HD wallet. With the software version you don't have the same level of protection of your secrets but you just really need to protect the seed instead of worrying about N different secret phrases if you want to use N different accounts. That's the second main advantage.

About privacy Ardor has the shuffling mechanism. With an HD wallet, either hardware or software, the standby shufflers can work much more easily so you don't need to create in advance several empty accounts and store the secret phrases. One HD wallet can handle an, in practice, unlimited amount of accounts. Keep in mind, though, that shuffling is not available for the ARDR chain. But you can exchange your ARDR for IGNIS, shuffle those, and buy ARDR back.

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