LightWallet is an HD wallet that implements BIP32, BIP39, and BIP44. LightWallet provides APIs to create and sign transactions or encrypt and decrypt data using the addresses and keys generated using it.

LightWallet API is divided into four namespaces, that is, keystore, signing, encryption, and txutils. signing, encrpytion, and txutils provide APIs to sign transactions, asymmetric cryptography, and create transactions respectively, whereas a keystore namespace is used to create a keystore, generated seed, and so on. keystore is an object that holds the seed and keys encrypted. The keystore namespace implements transaction signer methods that requires signing the we3.eth.sendTransaction() calls if we are using Hooked-Web3-Provider. Therefore the keystore namespace can automatically create and sign transactions for the addresses that it can find in it. Actually, LightWallet is primarily intended to be a signing provider for the Hooked-Web3-Provider.

A keystore instance can be configured to either create and sign transactions or encrypt and decrypt data. For signing transactions, it uses the secp256k1 parameter, and for encryption and decryption, it uses the curve25519 parameter.

The seed of LightWallet is a 12-word mnemonic, which is easy to remember yet difficult to hack. It cannot be any 12 words; instead, it should be a seed generated by LightWallet. A seed generated by LightWallet has certain properties in terms of selection of words and other things.