What is Bitcoin Improvement Proposal (BIP) 32?

Bitcoin Improvement Proposal (BIP) 32 established the standard for hierarchical-deterministic (HD) wallets, a technical improvement over earlier wallets that only had random key pairs. BIP 32 allowed for the creation of a hierarchical tree-like wallet structure with more advanced cryptographic security mechanisms. HD wallets are defined by a master key pair at the top of the hierarchy that "determines" all the private key and key pair access codes below it in the access hierarchy.