An extended public key (xpub) is a primary ingredient for building a bitcoin wallet.
An extended public key (xpub) is a public key that can create other public keys.
Xpubs are used to build wallets. The plain public keys produced from them are used to build the addresses for the wallet.
Learn: Discover more about xpubs, plain public keys, and addresses in our article about the anatomy of a bitcoin wallet.
Singlesig wallets are built with just one xpub, and each address for the wallet is built with just one plain public key.
Meanwhile, multisig wallets are created with one xpub from each master private key (or seed phrase) that's involved. Multisig addresses are built with one plain public key from each xpub.
How does Unchained use xpubs?
To build a 2-of-3 multisig vault with Unchained, three xpubs are required.
When you upload two xpubs from two hardware wallets to your Unchained account, this allows you to build a multisig vault with your two keys and the Unchained key. The vault can then produce unlimited unique addresses.
Xpubs are not as sensitive as private keys, because they cannot give someone permission to spend funds. Instead, they are used for building wallets, viewing wallet balances, and receiving bitcoin into a wallet.
If you want to learn more, our engineer Justin Moore has an insightful write-up on xpubs that you may find helpful.