waddrmgr: create watch-only address managers and accounts

This PR allows the creation of managers and accounts that are watch-only. The state of the database after creation would be identical to the state after calling 

Manager.ConvertToWatchingOnly, assuming accounts with the right xpubs were created in the former case.

Co-authored-by: Ken Sedgwick <ken@bonsai.com>

waddrmgr/README.md

@@ -32,8 +32,9 @@ report.  Package waddrmgr is licensed under the liberal ISC license.
   - Import WIF keys
   - Import pay-to-script-hash scripts for things such as multi-signature
     transactions
-  - Ability to export a watching-only version which does not contain any private
+  - Ability to start in watching-only mode which does not contain any private
     key material
+  - Ability to convert to watching-only mode
   - Programmatically detectable errors, including encapsulation of errors from
     packages it relies on
   - Address synchronization capabilities

waddrmgr/db.go

@@ -850,6 +850,7 @@ func forEachAccount(ns walletdb.ReadBucket, scope *KeyScope,
 }
 
 // fetchLastAccount retrieves the last account from the database.
+// If no accounts, returns twos-complement representation of -1, so that the next account is zero
 func fetchLastAccount(ns walletdb.ReadBucket, scope *KeyScope) (uint32, error) {
 	scopedBucket, err := fetchReadScopeBucket(ns, scope)
 	if err != nil {
@@ -859,6 +860,9 @@ func fetchLastAccount(ns walletdb.ReadBucket, scope *KeyScope) (uint32, error) {
 	metaBucket := scopedBucket.NestedReadBucket(metaBucketName)
 
 	val := metaBucket.Get(lastAccountName)
+	if val == nil {
+		return (1 << 32) - 1, nil
+	}
 	if len(val) != 4 {
 		str := fmt.Sprintf("malformed metadata '%s' stored in database",
 			lastAccountName)

waddrmgr/manager.go

@@ -438,54 +438,62 @@ func (m *Manager) Close() {
 //
 // TODO(roasbeef): addrtype of raw key means it'll look in scripts to possibly
 // mark as gucci?
-func (m *Manager) NewScopedKeyManager(ns walletdb.ReadWriteBucket, scope KeyScope,
+func (m *Manager) NewScopedKeyManager(ns walletdb.ReadWriteBucket,
-	addrSchema ScopeAddrSchema) (*ScopedKeyManager, error) {
+	scope KeyScope, addrSchema ScopeAddrSchema) (*ScopedKeyManager, error) {
 
 	m.mtx.Lock()
 	defer m.mtx.Unlock()
 
-	// If the manager is locked, then we can't create a new scoped manager.
+	var rootPriv *hdkeychain.ExtendedKey
+	if !m.watchingOnly {
+		// If the manager is locked, then we can't create a new scoped
+		// manager.
 		if m.locked {
 			return nil, managerError(ErrLocked, errLocked, nil)
 		}
 
-	// Now that we know the manager is unlocked, we'll need to fetch the
+		// Now that we know the manager is unlocked, we'll need to
-	// root master HD private key. This is required as we'll be attempting
+		// fetch the root master HD private key. This is required as
-	// the following derivation: m/purpose'/cointype'
+		// we'll be attempting the following derivation:
+		// m/purpose'/cointype'
 		//
-	// Note that the path to the coin type is requires hardened derivation,
+		// Note that the path to the coin type is requires hardened
-	// therefore this can only be done if the wallet's root key hasn't been
+		// derivation, therefore this can only be done if the wallet's
-	// neutered.
+		// root key hasn't been neutered.
 		masterRootPrivEnc, _, err := fetchMasterHDKeys(ns)
 		if err != nil {
 			return nil, err
 		}
 
-	// If the master root private key isn't found within the database, but
+		// If the master root private key isn't found within the
-	// we need to bail here as we can't create the cointype key without the
+		// database, but we need to bail here as we can't create the
-	// master root private key.
+		// cointype key without the master root private key.
 		if masterRootPrivEnc == nil {
 			return nil, managerError(ErrWatchingOnly, "", nil)
 		}
 
-	// Before we can derive any new scoped managers using this key, we'll
+		// Before we can derive any new scoped managers using this
-	// need to fully decrypt it.
+		// key, we'll need to fully decrypt it.
-	serializedMasterRootPriv, err := m.cryptoKeyPriv.Decrypt(masterRootPrivEnc)
+		serializedMasterRootPriv, err :=
+			m.cryptoKeyPriv.Decrypt(masterRootPrivEnc)
 		if err != nil {
-		str := fmt.Sprintf("failed to decrypt master root serialized private key")
+			str := fmt.Sprintf("failed to decrypt master root " +
+				"serialized private key")
 			return nil, managerError(ErrLocked, str, err)
 		}
 
-	// Now that we know the root priv is within the database, we'll decode
+		// Now that we know the root priv is within the database,
-	// it into a usable object.
+		// we'll decode it into a usable object.
-	rootPriv, err := hdkeychain.NewKeyFromString(
+		rootPriv, err = hdkeychain.NewKeyFromString(
 			string(serializedMasterRootPriv),
 		)
 		zero.Bytes(serializedMasterRootPriv)
 		if err != nil {
-		str := fmt.Sprintf("failed to create master extended private key")
+			str := fmt.Sprintf("failed to create master extended " +
+				"private key")
 			return nil, managerError(ErrKeyChain, str, err)
 		}
+	}
 
 	// Now that we have the root private key, we'll fetch the scope bucket
 	// so we can create the proper internal name spaces.
@@ -506,20 +514,22 @@ func (m *Manager) NewScopedKeyManager(ns walletdb.ReadWriteBucket, scope KeyScop
 	}
 	scopeKey := scopeToBytes(&scope)
 	schemaBytes := scopeSchemaToBytes(&addrSchema)
-	err = scopeSchemas.Put(scopeKey[:], schemaBytes)
+	err := scopeSchemas.Put(scopeKey[:], schemaBytes)
 	if err != nil {
 		return nil, err
 	}
 
-	// With the database state created, we'll now derive the cointype key
+	if !m.watchingOnly {
-	// using the master HD private key, then encrypt it along with the
+		// With the database state created, we'll now derive the
-	// first account using our crypto keys.
+		// cointype key using the master HD private key, then encrypt
+		// it along with the first account using our crypto keys.
 		err = createManagerKeyScope(
 			ns, scope, rootPriv, m.cryptoKeyPub, m.cryptoKeyPriv,
 		)
 		if err != nil {
 			return nil, err
 		}
+	}
 
 	// Finally, we'll register this new scoped manager with the root
 	// manager.
@@ -1298,7 +1308,7 @@ func newManager(chainParams *chaincfg.Params, masterKeyPub *snacl.SecretKey,
 	masterKeyPriv *snacl.SecretKey, cryptoKeyPub EncryptorDecryptor,
 	cryptoKeyPrivEncrypted, cryptoKeyScriptEncrypted []byte, syncInfo *syncState,
 	birthday time.Time, privPassphraseSalt [saltSize]byte,
-	scopedManagers map[KeyScope]*ScopedKeyManager) *Manager {
+	scopedManagers map[KeyScope]*ScopedKeyManager, watchingOnly bool) *Manager {
 
 	m := &Manager{
 		chainParams:              chainParams,
@@ -1316,6 +1326,7 @@ func newManager(chainParams *chaincfg.Params, masterKeyPub *snacl.SecretKey,
 		scopedManagers:           scopedManagers,
 		externalAddrSchemas:      make(map[AddressType][]KeyScope),
 		internalAddrSchemas:      make(map[AddressType][]KeyScope),
+		watchingOnly:             watchingOnly,
 	}
 
 	for _, sMgr := range m.scopedManagers {
@@ -1540,9 +1551,8 @@ func loadManager(ns walletdb.ReadBucket, pubPassphrase []byte,
 	mgr := newManager(
 		chainParams, &masterKeyPub, &masterKeyPriv,
 		cryptoKeyPub, cryptoKeyPrivEnc, cryptoKeyScriptEnc, syncInfo,
-		birthday, privPassphraseSalt, scopedManagers,
+		birthday, privPassphraseSalt, scopedManagers, watchingOnly,
 	)
-	mgr.watchingOnly = watchingOnly
 
 	for _, scopedManager := range scopedManagers {
 		scopedManager.rootManager = mgr
@@ -1676,27 +1686,40 @@ func createManagerKeyScope(ns walletdb.ReadWriteBucket,
 	)
 }
 
-// Create creates a new address manager in the given namespace.  The seed must
+// Create creates a new address manager in the given namespace.
-// conform to the standards described in hdkeychain.NewMaster and will be used
-// to create the master root node from which all hierarchical deterministic
-// addresses are derived.  This allows all chained addresses in the address
-// manager to be recovered by using the same seed.
 //
-// All private and public keys and information are protected by secret keys
+// The seed must conform to the standards described in
-// derived from the provided private and public passphrases.  The public
+// hdkeychain.NewMaster and will be used to create the master root
-// passphrase is required on subsequent opens of the address manager, and the
+// node from which all hierarchical deterministic addresses are
-// private passphrase is required to unlock the address manager in order to
+// derived.  This allows all chained addresses in the address manager
-// gain access to any private keys and information.
+// to be recovered by using the same seed.
 //
-// If a config structure is passed to the function, that configuration will
+// If the provided seed value is nil the address manager will be
-// override the defaults.
+// created in watchingOnly mode in which case no default accounts or
+// scoped managers are created - it is up to the caller to create a
+// new one with NewAccountWatchingOnly and NewScopedKeyManager.
 //
-// A ManagerError with an error code of ErrAlreadyExists will be returned the
+// All private and public keys and information are protected by secret
-// address manager already exists in the specified namespace.
+// keys derived from the provided private and public passphrases.  The
-func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []byte,
+// public passphrase is required on subsequent opens of the address
+// manager, and the private passphrase is required to unlock the
+// address manager in order to gain access to any private keys and
+// information.
+//
+// If a config structure is passed to the function, that configuration
+// will override the defaults.
+//
+// A ManagerError with an error code of ErrAlreadyExists will be
+// returned the address manager already exists in the specified
+// namespace.
+func Create(ns walletdb.ReadWriteBucket,
+	seed, pubPassphrase, privPassphrase []byte,
 	chainParams *chaincfg.Params, config *ScryptOptions,
 	birthday time.Time) error {
 
+	// If the seed argument is nil we create in watchingOnly mode.
+	isWatchingOnly := seed == nil
+
 	// Return an error if the manager has already been created in
 	// the given database namespace.
 	exists := managerExists(ns)
@@ -1705,13 +1728,17 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 	}
 
 	// Ensure the private passphrase is not empty.
-	if len(privPassphrase) == 0 {
+	if !isWatchingOnly && len(privPassphrase) == 0 {
 		str := "private passphrase may not be empty"
 		return managerError(ErrEmptyPassphrase, str, nil)
 	}
 
 	// Perform the initial bucket creation and database namespace setup.
-	if err := createManagerNS(ns, ScopeAddrMap); err != nil {
+	defaultScopes := map[KeyScope]ScopeAddrSchema{}
+	if !isWatchingOnly {
+		defaultScopes = ScopeAddrMap
+	}
+	if err := createManagerNS(ns, defaultScopes); err != nil {
 		return maybeConvertDbError(err)
 	}
 
@@ -1726,22 +1753,6 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 		str := "failed to master public key"
 		return managerError(ErrCrypto, str, err)
 	}
-	masterKeyPriv, err := newSecretKey(&privPassphrase, config)
-	if err != nil {
-		str := "failed to master private key"
-		return managerError(ErrCrypto, str, err)
-	}
-	defer masterKeyPriv.Zero()
-
-	// Generate the private passphrase salt.  This is used when hashing
-	// passwords to detect whether an unlock can be avoided when the manager
-	// is already unlocked.
-	var privPassphraseSalt [saltSize]byte
-	_, err = rand.Read(privPassphraseSalt[:])
-	if err != nil {
-		str := "failed to read random source for passphrase salt"
-		return managerError(ErrCrypto, str, err)
-	}
 
 	// Generate new crypto public, private, and script keys.  These keys are
 	// used to protect the actual public and private data such as addresses,
@@ -1751,6 +1762,45 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 		str := "failed to generate crypto public key"
 		return managerError(ErrCrypto, str, err)
 	}
+
+	// Encrypt the crypto keys with the associated master keys.
+	cryptoKeyPubEnc, err := masterKeyPub.Encrypt(cryptoKeyPub.Bytes())
+	if err != nil {
+		str := "failed to encrypt crypto public key"
+		return managerError(ErrCrypto, str, err)
+	}
+
+	// Use the genesis block for the passed chain as the created at block
+	// for the default.
+	createdAt := &BlockStamp{Hash: *chainParams.GenesisHash, Height: 0}
+
+	// Create the initial sync state.
+	syncInfo := newSyncState(createdAt, createdAt)
+
+	pubParams := masterKeyPub.Marshal()
+
+	var privParams []byte = nil
+	var masterKeyPriv *snacl.SecretKey
+	var cryptoKeyPrivEnc []byte = nil
+	var cryptoKeyScriptEnc []byte = nil
+	if !isWatchingOnly {
+		masterKeyPriv, err = newSecretKey(&privPassphrase, config)
+		if err != nil {
+			str := "failed to master private key"
+			return managerError(ErrCrypto, str, err)
+		}
+		defer masterKeyPriv.Zero()
+
+		// Generate the private passphrase salt.  This is used when
+		// hashing passwords to detect whether an unlock can be
+		// avoided when the manager is already unlocked.
+		var privPassphraseSalt [saltSize]byte
+		_, err = rand.Read(privPassphraseSalt[:])
+		if err != nil {
+			str := "failed to read random source for passphrase salt"
+			return managerError(ErrCrypto, str, err)
+		}
+
 		cryptoKeyPriv, err := newCryptoKey()
 		if err != nil {
 			str := "failed to generate crypto private key"
@@ -1764,40 +1814,22 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 		}
 		defer cryptoKeyScript.Zero()
 
-	// Encrypt the crypto keys with the associated master keys.
+		cryptoKeyPrivEnc, err =
-	cryptoKeyPubEnc, err := masterKeyPub.Encrypt(cryptoKeyPub.Bytes())
+			masterKeyPriv.Encrypt(cryptoKeyPriv.Bytes())
-	if err != nil {
-		str := "failed to encrypt crypto public key"
-		return managerError(ErrCrypto, str, err)
-	}
-	cryptoKeyPrivEnc, err := masterKeyPriv.Encrypt(cryptoKeyPriv.Bytes())
 		if err != nil {
 			str := "failed to encrypt crypto private key"
 			return managerError(ErrCrypto, str, err)
 		}
-	cryptoKeyScriptEnc, err := masterKeyPriv.Encrypt(cryptoKeyScript.Bytes())
+		cryptoKeyScriptEnc, err =
+			masterKeyPriv.Encrypt(cryptoKeyScript.Bytes())
 		if err != nil {
 			str := "failed to encrypt crypto script key"
 			return managerError(ErrCrypto, str, err)
 		}
 
-	// Use the genesis block for the passed chain as the created at block
+		// Generate the BIP0044 HD key structure to ensure the
-	// for the default.
+		// provided seed can generate the required structure with no
-	createdAt := &BlockStamp{Hash: *chainParams.GenesisHash, Height: 0}
+		// issues.
-
-	// Create the initial sync state.
-	syncInfo := newSyncState(createdAt, createdAt)
-
-	// Save the master key params to the database.
-	pubParams := masterKeyPub.Marshal()
-	privParams := masterKeyPriv.Marshal()
-	err = putMasterKeyParams(ns, pubParams, privParams)
-	if err != nil {
-		return maybeConvertDbError(err)
-	}
-
-	// Generate the BIP0044 HD key structure to ensure the provided seed
-	// can generate the required structure with no issues.
 
 		// Derive the master extended key from the seed.
 		rootKey, err := hdkeychain.NewMaster(seed, chainParams)
@@ -1811,8 +1843,9 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 			return managerError(ErrKeyChain, str, err)
 		}
 
-	// Next, for each registers default manager scope, we'll create the
+		// Next, for each registers default manager scope, we'll
-	// hardened cointype key for it, as well as the first default account.
+		// create the hardened cointype key for it, as well as the
+		// first default account.
 		for _, defaultScope := range DefaultKeyScopes {
 			err := createManagerKeyScope(
 				ns, defaultScope, rootKey, cryptoKeyPub, cryptoKeyPriv,
@@ -1822,14 +1855,17 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 			}
 		}
 
-	// Before we proceed, we'll also store the root master private key
+		// Before we proceed, we'll also store the root master private
-	// within the database in an encrypted format. This is required as in
+		// key within the database in an encrypted format. This is
-	// the future, we may need to create additional scoped key managers.
+		// required as in the future, we may need to create additional
-	masterHDPrivKeyEnc, err := cryptoKeyPriv.Encrypt([]byte(rootKey.String()))
+		// scoped key managers.
+		masterHDPrivKeyEnc, err :=
+			cryptoKeyPriv.Encrypt([]byte(rootKey.String()))
 		if err != nil {
 			return maybeConvertDbError(err)
 		}
-	masterHDPubKeyEnc, err := cryptoKeyPub.Encrypt([]byte(rootPubKey.String()))
+		masterHDPubKeyEnc, err :=
+			cryptoKeyPub.Encrypt([]byte(rootPubKey.String()))
 		if err != nil {
 			return maybeConvertDbError(err)
 		}
@@ -1838,6 +1874,15 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 			return maybeConvertDbError(err)
 		}
 
+		privParams = masterKeyPriv.Marshal()
+	}
+
+	// Save the master key params to the database.
+	err = putMasterKeyParams(ns, pubParams, privParams)
+	if err != nil {
+		return maybeConvertDbError(err)
+	}
+
 	// Save the encrypted crypto keys to the database.
 	err = putCryptoKeys(ns, cryptoKeyPubEnc, cryptoKeyPrivEnc,
 		cryptoKeyScriptEnc)
@@ -1845,9 +1890,9 @@ func Create(ns walletdb.ReadWriteBucket, seed, pubPassphrase, privPassphrase []b
 		return maybeConvertDbError(err)
 	}
 
-	// Save the fact this is not a watching-only address manager to the
+	// Save the watching-only mode of the address manager to the
 	// database.
-	err = putWatchingOnly(ns, false)
+	err = putWatchingOnly(ns, isWatchingOnly)
 	if err != nil {
 		return maybeConvertDbError(err)
 	}

waddrmgr/manager_test.go

@@ -17,6 +17,7 @@ import (
 	"github.com/btcsuite/btcd/chaincfg"
 	"github.com/btcsuite/btcd/chaincfg/chainhash"
 	"github.com/btcsuite/btcutil"
+	"github.com/btcsuite/btcutil/hdkeychain"
 	"github.com/btcsuite/btcwallet/snacl"
 	"github.com/btcsuite/btcwallet/walletdb"
 	"github.com/davecgh/go-spew/spew"
@@ -71,6 +72,7 @@ func failingSecretKeyGen(passphrase *[]byte,
 // spent.
 type testContext struct {
 	t            *testing.T
+	caseName     string
 	db           walletdb.DB
 	rootManager  *Manager
 	manager      *ScopedKeyManager
@@ -112,7 +114,7 @@ func testNamePrefix(tc *testContext) string {
 		prefix = "Create "
 	}
 
-	return prefix + fmt.Sprintf("account #%d", tc.account)
+	return fmt.Sprintf("(%s) %s account #%d", tc.caseName, prefix, tc.account)
 }
 
 // testManagedPubKeyAddress ensures the data returned by all exported functions
@@ -1049,7 +1051,7 @@ func testImportScript(tc *testContext) bool {
 }
 
 // testMarkUsed ensures used addresses are flagged as such.
-func testMarkUsed(tc *testContext) bool {
+func testMarkUsed(tc *testContext, doScript bool) bool {
 	tests := []struct {
 		name string
 		typ  addrType
@@ -1067,9 +1069,12 @@ func testMarkUsed(tc *testContext) bool {
 		},
 	}
 
-	prefix := "MarkUsed"
+	prefix := fmt.Sprintf("(%s) MarkUsed", tc.caseName)
 	chainParams := tc.manager.ChainParams()
 	for i, test := range tests {
+		if !doScript && test.typ == addrScriptHash {
+			continue
+		}
 		addrHash := test.in
 
 		var addr btcutil.Address
@@ -1116,7 +1121,7 @@ func testMarkUsed(tc *testContext) bool {
 			return nil
 		})
 		if err != nil {
-			tc.t.Errorf("Unexpected error %v", err)
+			tc.t.Errorf("(%s) Unexpected error %v", tc.caseName, err)
 		}
 	}
 
@@ -1126,10 +1131,12 @@ func testMarkUsed(tc *testContext) bool {
 // testChangePassphrase ensures changes both the public and private passphrases
 // works as intended.
 func testChangePassphrase(tc *testContext) bool {
+	pfx := fmt.Sprintf("(%s) ", tc.caseName)
+
 	// Force an error when changing the passphrase due to failure to
 	// generate a new secret key by replacing the generation function one
 	// that intentionally errors.
-	testName := "ChangePassphrase (public) with invalid new secret key"
+	testName := pfx + "ChangePassphrase (public) with invalid new secret key"
 
 	oldKeyGen := SetSecretKeyGen(failingSecretKeyGen)
 	err := walletdb.Update(tc.db, func(tx walletdb.ReadWriteTx) error {
@@ -1143,7 +1150,7 @@ func testChangePassphrase(tc *testContext) bool {
 	}
 
 	// Attempt to change public passphrase with invalid old passphrase.
-	testName = "ChangePassphrase (public) with invalid old passphrase"
+	testName = pfx + "ChangePassphrase (public) with invalid old passphrase"
 	SetSecretKeyGen(oldKeyGen)
 	err = walletdb.Update(tc.db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
@@ -1156,7 +1163,7 @@ func testChangePassphrase(tc *testContext) bool {
 	}
 
 	// Change the public passphrase.
-	testName = "ChangePassphrase (public)"
+	testName = pfx + "ChangePassphrase (public)"
 	err = walletdb.Update(tc.db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
 		return tc.rootManager.ChangePassphrase(
@@ -1192,7 +1199,7 @@ func testChangePassphrase(tc *testContext) bool {
 	// Attempt to change private passphrase with invalid old passphrase.
 	// The error should be ErrWrongPassphrase or ErrWatchingOnly depending
 	// on the type of the address manager.
-	testName = "ChangePassphrase (private) with invalid old passphrase"
+	testName = pfx + "ChangePassphrase (private) with invalid old passphrase"
 	err = walletdb.Update(tc.db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
 		return tc.rootManager.ChangePassphrase(
@@ -1216,7 +1223,7 @@ func testChangePassphrase(tc *testContext) bool {
 	}
 
 	// Change the private passphrase.
-	testName = "ChangePassphrase (private)"
+	testName = pfx + "ChangePassphrase (private)"
 	err = walletdb.Update(tc.db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
 		return tc.rootManager.ChangePassphrase(
@@ -1379,6 +1386,18 @@ func testLookupAccount(tc *testContext) bool {
 		defaultAccountName:      DefaultAccountNum,
 		ImportedAddrAccountName: ImportedAddrAccount,
 	}
+
+	var expectedLastAccount uint32 = 1
+	if !tc.create {
+		// Existing wallet manager will have 3 accounts
+		expectedLastAccount = 2
+	}
+
+	return testLookupExpectedAccount(tc, expectedAccounts, expectedLastAccount)
+}
+
+func testLookupExpectedAccount(tc *testContext, expectedAccounts map[string]uint32,
+	expectedLastAccount uint32) bool {
 	for acctName, expectedAccount := range expectedAccounts {
 		var account uint32
 		err := walletdb.View(tc.db, func(tx walletdb.ReadTx) error {
@@ -1418,19 +1437,12 @@ func testLookupAccount(tc *testContext) bool {
 		lastAccount, err = tc.manager.LastAccount(ns)
 		return err
 	})
-	var expectedLastAccount uint32
-	expectedLastAccount = 1
-	if !tc.create {
-		// Existing wallet manager will have 3 accounts
-		expectedLastAccount = 2
-	}
 	if lastAccount != expectedLastAccount {
 		tc.t.Errorf("LookupAccount "+
 			"account mismatch -- got %d, "+
 			"want %d", lastAccount, expectedLastAccount)
 		return false
 	}
-
 	// Test account lookup for default account adddress
 	var expectedAccount uint32
 	for i, addr := range expectedAddrs {
@@ -1608,13 +1620,15 @@ func testForEachAccountAddress(tc *testContext) bool {
 // testManagerAPI tests the functions provided by the Manager API as well as
 // the ManagedAddress, ManagedPubKeyAddress, and ManagedScriptAddress
 // interfaces.
-func testManagerAPI(tc *testContext) {
+func testManagerAPI(tc *testContext, caseCreatedWatchingOnly bool) {
+	if !caseCreatedWatchingOnly {
+		// Test API for normal create (w/ seed) case.
 		testLocking(tc)
 		testExternalAddresses(tc)
 		testInternalAddresses(tc)
 		testImportPrivateKey(tc)
 		testImportScript(tc)
-	testMarkUsed(tc)
+		testMarkUsed(tc, true)
 		testChangePassphrase(tc)
 
 		// Reset default account
@@ -1627,12 +1641,30 @@ func testManagerAPI(tc *testContext) {
 		// Rename account 1 "acct-create"
 		tc.account = 1
 		testRenameAccount(tc)
+	} else {
+		// Test API for created watch-only case.
+		testExternalAddresses(tc)
+		testInternalAddresses(tc)
+		testMarkUsed(tc, false)
+		testChangePassphrase(tc)
+
+		testNewAccount(tc)
+		expectedAccounts := map[string]uint32{
+			defaultAccountName: DefaultAccountNum,
+		}
+		testLookupExpectedAccount(tc, expectedAccounts, 0)
+		//testForEachAccount(tc)
+		testForEachAccountAddress(tc)
+	}
 }
 
-// testWatchingOnly tests various facets of a watching-only address
+// testConvertWatchingOnly tests various facets of a watching-only address
 // manager such as running the full set of API tests against a newly converted
 // copy as well as when it is opened from an existing namespace.
-func testWatchingOnly(tc *testContext) bool {
+func testConvertWatchingOnly(tc *testContext) bool {
+	// These tests check the case where the manager was not initially
+	// created watch-only, but converted to watch only ...
+
 	// Make a copy of the current database so the copy can be converted to
 	// watching only.
 	woMgrName := "mgrtestwo.bin"
@@ -1689,13 +1721,14 @@ func testWatchingOnly(tc *testContext) bool {
 	}
 	testManagerAPI(&testContext{
 		t:            tc.t,
+		caseName:     tc.caseName,
 		db:           db,
 		rootManager:  mgr,
 		manager:      scopedMgr,
 		account:      0,
 		create:       false,
 		watchingOnly: true,
-	})
+	}, false)
 	mgr.Close()
 
 	// Open the watching-only manager and run all the tests again.
@@ -1719,13 +1752,14 @@ func testWatchingOnly(tc *testContext) bool {
 
 	testManagerAPI(&testContext{
 		t:            tc.t,
+		caseName:     tc.caseName,
 		db:           db,
 		rootManager:  mgr,
 		manager:      scopedMgr,
 		account:      0,
 		create:       false,
 		watchingOnly: true,
-	})
+	}, false)
 
 	return true
 }
@@ -1739,7 +1773,8 @@ func testSync(tc *testContext) bool {
 		return tc.rootManager.SetSyncedTo(ns, nil)
 	})
 	if err != nil {
-		tc.t.Errorf("SetSyncedTo unexpected err on nil: %v", err)
+		tc.t.Errorf("(%s) SetSyncedTo unexpected err on nil: %v",
+			tc.caseName, err)
 		return false
 	}
 	blockStamp := BlockStamp{
@@ -1748,8 +1783,8 @@ func testSync(tc *testContext) bool {
 	}
 	gotBlockStamp := tc.rootManager.SyncedTo()
 	if gotBlockStamp != blockStamp {
-		tc.t.Errorf("SyncedTo unexpected block stamp on nil -- "+
+		tc.t.Errorf("(%s) SyncedTo unexpected block stamp on nil -- "+
-			"got %v, want %v", gotBlockStamp, blockStamp)
+			"got %v, want %v", tc.caseName, gotBlockStamp, blockStamp)
 		return false
 	}
 
@@ -1789,9 +1824,40 @@ func testSync(tc *testContext) bool {
 func TestManager(t *testing.T) {
 	t.Parallel()
 
+	tests := []struct {
+		name                string
+		createdWatchingOnly bool
+		seed                []byte
+		privPassphrase      []byte
+	}{
+		{
+			name:                "created with seed",
+			createdWatchingOnly: false,
+			seed:                seed,
+			privPassphrase:      privPassphrase,
+		},
+		{
+			name:                "created watch-only",
+			createdWatchingOnly: true,
+			seed:                nil,
+			privPassphrase:      nil,
+		},
+	}
+
+	for _, test := range tests {
+		// Need to wrap in a call so the defers work correctly.
+		testManagerCase(t, test.name, test.createdWatchingOnly,
+			test.seed, test.privPassphrase)
+	}
+}
+
+func testManagerCase(t *testing.T, caseName string,
+	caseCreatedWatchingOnly bool, caseSeed, casePrivPassphrase []byte) {
+
 	teardown, db := emptyDB(t)
 	defer teardown()
 
+	if !caseCreatedWatchingOnly {
 		// Open manager that does not exist to ensure the expected error is
 		// returned.
 		err := walletdb.View(db, func(tx walletdb.ReadTx) error {
@@ -1799,29 +1865,38 @@ func TestManager(t *testing.T) {
 			_, err := Open(ns, pubPassphrase, &chaincfg.MainNetParams)
 			return err
 		})
-	if !checkManagerError(t, "Open non-existant", err, ErrNoExist) {
+		if !checkManagerError(t, "Open non-existent", err, ErrNoExist) {
 			return
 		}
+	}
 
 	// Create a new manager.
 	var mgr *Manager
-	err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+	err := walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
 		ns, err := tx.CreateTopLevelBucket(waddrmgrNamespaceKey)
 		if err != nil {
 			return err
 		}
 		err = Create(
-			ns, seed, pubPassphrase, privPassphrase,
+			ns, caseSeed, pubPassphrase, casePrivPassphrase,
 			&chaincfg.MainNetParams, fastScrypt, time.Time{},
 		)
 		if err != nil {
 			return err
 		}
 		mgr, err = Open(ns, pubPassphrase, &chaincfg.MainNetParams)
+		if err != nil {
+			return err
+		}
+
+		if caseCreatedWatchingOnly {
+			_, err = mgr.NewScopedKeyManager(
+				ns, KeyScopeBIP0044, ScopeAddrMap[KeyScopeBIP0044])
+		}
 		return err
 	})
 	if err != nil {
-		t.Errorf("Create/Open: unexpected error: %v", err)
+		t.Errorf("(%s) Create/Open: unexpected error: %v", caseName, err)
 		return
 	}
 
@@ -1833,30 +1908,58 @@ func TestManager(t *testing.T) {
 	err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
 		return Create(
-			ns, seed, pubPassphrase, privPassphrase,
+			ns, caseSeed, pubPassphrase, casePrivPassphrase,
 			&chaincfg.MainNetParams, fastScrypt, time.Time{},
 		)
 	})
-	if !checkManagerError(t, "Create existing", err, ErrAlreadyExists) {
+	if !checkManagerError(t, fmt.Sprintf("(%s) Create existing", caseName),
+		err, ErrAlreadyExists) {
 		mgr.Close()
 		return
 	}
 
-	// Run all of the manager API tests in create mode and close the
-	// manager after they've completed
 	scopedMgr, err := mgr.FetchScopedKeyManager(KeyScopeBIP0044)
 	if err != nil {
-		t.Fatalf("unable to fetch default scope: %v", err)
+		t.Fatalf("(%s) unable to fetch default scope: %v", caseName, err)
 	}
+
+	if caseCreatedWatchingOnly {
+		accountKey := deriveTestAccountKey(t)
+		if accountKey == nil {
+			return
+		}
+
+		acctKeyPub, err := accountKey.Neuter()
+		if err != nil {
+			t.Errorf("(%s) Neuter: unexpected error: %v", caseName, err)
+			return
+		}
+
+		// Create the default account
+		err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+			ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
+			_, err = scopedMgr.NewAccountWatchingOnly(
+				ns, defaultAccountName, acctKeyPub)
+			return err
+		})
+		if err != nil {
+			t.Errorf("NewAccountWatchingOnly: unexpected error: %v", err)
+			return
+		}
+	}
+
+	// Run all of the manager API tests in create mode and close the
+	// manager after they've completed
 	testManagerAPI(&testContext{
 		t:            t,
+		caseName:     caseName,
 		db:           db,
 		manager:      scopedMgr,
 		rootManager:  mgr,
 		account:      0,
 		create:       true,
-		watchingOnly: false,
+		watchingOnly: caseCreatedWatchingOnly,
-	})
+	}, caseCreatedWatchingOnly)
 	mgr.Close()
 
 	// Open the manager and run all the tests again in open mode which
@@ -1868,42 +1971,66 @@ func TestManager(t *testing.T) {
 		return err
 	})
 	if err != nil {
-		t.Errorf("Open: unexpected error: %v", err)
+		t.Errorf("(%s) Open: unexpected error: %v", caseName, err)
 		return
 	}
 	defer mgr.Close()
 
 	scopedMgr, err = mgr.FetchScopedKeyManager(KeyScopeBIP0044)
 	if err != nil {
-		t.Fatalf("unable to fetch default scope: %v", err)
+		t.Fatalf("(%s) unable to fetch default scope: %v", caseName, err)
 	}
 	tc := &testContext{
 		t:            t,
+		caseName:     caseName,
 		db:           db,
 		manager:      scopedMgr,
 		rootManager:  mgr,
 		account:      0,
 		create:       false,
-		watchingOnly: false,
+		watchingOnly: caseCreatedWatchingOnly,
 	}
-	testManagerAPI(tc)
+	testManagerAPI(tc, caseCreatedWatchingOnly)
 
+	if !caseCreatedWatchingOnly {
 		// Now that the address manager has been tested in both the newly
 		// created and opened modes, test a watching-only version.
-	testWatchingOnly(tc)
+		testConvertWatchingOnly(tc)
+	}
 
 	// Ensure that the manager sync state functionality works as expected.
 	testSync(tc)
 
+	if !caseCreatedWatchingOnly {
 		// Unlock the manager so it can be closed with it unlocked to ensure
 		// it works without issue.
 		err = walletdb.View(db, func(tx walletdb.ReadTx) error {
 			ns := tx.ReadBucket(waddrmgrNamespaceKey)
-		return mgr.Unlock(ns, privPassphrase)
+			return mgr.Unlock(ns, casePrivPassphrase)
 		})
 		if err != nil {
 			t.Errorf("Unlock: unexpected error: %v", err)
 		}
+	}
+}
+
+func deriveTestAccountKey(t *testing.T) *hdkeychain.ExtendedKey {
+	masterKey, err := hdkeychain.NewMaster(seed, &chaincfg.MainNetParams)
+	if err != nil {
+		t.Errorf("NewMaster: unexpected error: %v", err)
+		return nil
+	}
+	scopeKey, err := deriveCoinTypeKey(masterKey, KeyScopeBIP0044)
+	if err != nil {
+		t.Errorf("derive: unexpected error: %v", err)
+		return nil
+	}
+	accountKey, err := deriveAccountKey(scopeKey, 0)
+	if err != nil {
+		t.Errorf("derive: unexpected error: %v", err)
+		return nil
+	}
+	return accountKey
 }
 
 // TestManagerIncorrectVersion ensures that that the manager cannot be accessed
@@ -2454,10 +2581,145 @@ func TestNewRawAccount(t *testing.T) {
 		t.Fatalf("unable to create new account: %v", err)
 	}
 
+	testNewRawAccount(t, mgr, db, accountNum, scopedMgr)
+}
+
+// TestNewRawAccountWatchingOnly tests that callers are able to
+// properly create, and use watching-only raw accounts created with
+// only an account number, and not a string which is eventually mapped
+// to an account number.
+func TestNewRawAccountWatchingOnly(t *testing.T) {
+	t.Parallel()
+
+	teardown, db := emptyDB(t)
+	defer teardown()
+
+	// We'll start the test by creating a new root manager that will be
+	// used for the duration of the test.
+	var mgr *Manager
+	err := walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+		ns, err := tx.CreateTopLevelBucket(waddrmgrNamespaceKey)
+		if err != nil {
+			return err
+		}
+		err = Create(
+			ns, nil, pubPassphrase, nil,
+			&chaincfg.MainNetParams, fastScrypt, time.Time{},
+		)
+		if err != nil {
+			return err
+		}
+		mgr, err = Open(ns, pubPassphrase, &chaincfg.MainNetParams)
+		if err != nil {
+			return err
+		}
+
+		_, err = mgr.NewScopedKeyManager(
+			ns, KeyScopeBIP0044, ScopeAddrMap[KeyScopeBIP0044])
+		return err
+	})
+	if err != nil {
+		t.Fatalf("create/open: unexpected error: %v", err)
+	}
+	defer mgr.Close()
+
+	// Now that we have the manager created, we'll fetch one of the default
+	// scopes for usage within this test.
+	scopedMgr, err := mgr.FetchScopedKeyManager(KeyScopeBIP0044)
+	if err != nil {
+		t.Fatalf("unable to fetch scope %v: %v", KeyScopeBIP0044, err)
+	}
+
+	accountKey := deriveTestAccountKey(t)
+	if accountKey == nil {
+		return
+	}
+
+	// With the scoped manager retrieved, we'll attempt to create a new raw
+	// account by number.
+	const accountNum = 1000
+	err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
+		return scopedMgr.NewRawAccountWatchingOnly(ns, accountNum, accountKey)
+	})
+	if err != nil {
+		t.Fatalf("unable to create new account: %v", err)
+	}
+
+	testNewRawAccount(t, mgr, db, accountNum, scopedMgr)
+}
+
+// TestNewRawAccountHybrid is similar to TestNewRawAccountWatchingOnly
+// except that the manager is created normally with a seed. This test
+// shows that watch-only accounts can be added to managers with
+// non-watch-only accounts.
+func TestNewRawAccountHybrid(t *testing.T) {
+	t.Parallel()
+
+	teardown, db := emptyDB(t)
+	defer teardown()
+
+	// We'll start the test by creating a new root manager that will be
+	// used for the duration of the test.
+	var mgr *Manager
+	err := walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+		ns, err := tx.CreateTopLevelBucket(waddrmgrNamespaceKey)
+		if err != nil {
+			return err
+		}
+		err = Create(
+			ns, seed, pubPassphrase, privPassphrase,
+			&chaincfg.MainNetParams, fastScrypt, time.Time{},
+		)
+		if err != nil {
+			return err
+		}
+		mgr, err = Open(ns, pubPassphrase, &chaincfg.MainNetParams)
+		return err
+	})
+	if err != nil {
+		t.Fatalf("create/open: unexpected error: %v", err)
+	}
+	defer mgr.Close()
+
+	// Now that we have the manager created, we'll fetch one of the default
+	// scopes for usage within this test.
+	scopedMgr, err := mgr.FetchScopedKeyManager(KeyScopeBIP0044)
+	if err != nil {
+		t.Fatalf("unable to fetch scope %v: %v", KeyScopeBIP0044, err)
+	}
+
+	accountKey := deriveTestAccountKey(t)
+	if accountKey == nil {
+		return
+	}
+
+	acctKeyPub, err := accountKey.Neuter()
+	if err != nil {
+		t.Errorf("Neuter: unexpected error: %v", err)
+		return
+	}
+
+	// With the scoped manager retrieved, we'll attempt to create a new raw
+	// account by number.
+	const accountNum = 1000
+	err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
+		return scopedMgr.NewRawAccountWatchingOnly(ns, accountNum, acctKeyPub)
+	})
+	if err != nil {
+		t.Fatalf("unable to create new account: %v", err)
+	}
+
+	testNewRawAccount(t, mgr, db, accountNum, scopedMgr)
+}
+
+func testNewRawAccount(t *testing.T, mgr *Manager, db walletdb.DB,
+	accountNum uint32, scopedMgr *ScopedKeyManager) {
 	// With the account created, we should be able to derive new addresses
 	// from the account.
 	var accountAddrNext ManagedAddress
-	err = walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
+	err := walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
 		ns := tx.ReadWriteBucket(waddrmgrNamespaceKey)
 
 		addrs, err := scopedMgr.NextExternalAddresses(

waddrmgr/scoped_manager.go

@@ -1187,7 +1187,7 @@ func (s *ScopedKeyManager) LastInternalAddress(ns walletdb.ReadBucket,
 }
 
 // NewRawAccount creates a new account for the scoped manager. This method
-// differs from the NewAccount method in that this method takes the acount
+// differs from the NewAccount method in that this method takes the account
 // number *directly*, rather than taking a string name for the account, then
 // mapping that to the next highest account number.
 func (s *ScopedKeyManager) NewRawAccount(ns walletdb.ReadWriteBucket, number uint32) error {
@@ -1209,6 +1209,24 @@ func (s *ScopedKeyManager) NewRawAccount(ns walletdb.ReadWriteBucket, number uin
 	return s.newAccount(ns, number, name)
 }
 
+// NewRawAccountWatchingOnly creates a new watching only account for
+// the scoped manager.  This method differs from the
+// NewAccountWatchingOnly method in that this method takes the account
+// number *directly*, rather than taking a string name for the
+// account, then mapping that to the next highest account number.
+func (s *ScopedKeyManager) NewRawAccountWatchingOnly(
+	ns walletdb.ReadWriteBucket, number uint32,
+	pubKey *hdkeychain.ExtendedKey) error {
+	s.mtx.Lock()
+	defer s.mtx.Unlock()
+
+	// As this is an ad hoc account that may not follow our normal linear
+	// derivation, we'll create a new name for this account based off of
+	// the account number.
+	name := fmt.Sprintf("act:%v", number)
+	return s.newAccountWatchingOnly(ns, number, name, pubKey)
+}
+
 // NewAccount creates and returns a new account stored in the manager based on
 // the given account name.  If an account with the same name already exists,
 // ErrDuplicateAccount will be returned.  Since creating a new account requires
@@ -1326,6 +1344,70 @@ func (s *ScopedKeyManager) newAccount(ns walletdb.ReadWriteBucket,
 	return putLastAccount(ns, &s.scope, account)
 }
 
+// NewAccountWatchingOnly is similar to NewAccount, but for watch-only wallets.
+func (s *ScopedKeyManager) NewAccountWatchingOnly(ns walletdb.ReadWriteBucket, name string,
+	pubKey *hdkeychain.ExtendedKey) (uint32, error) {
+	s.mtx.Lock()
+	defer s.mtx.Unlock()
+
+	// Fetch latest account, and create a new account in the same
+	// transaction Fetch the latest account number to generate the next
+	// account number
+	account, err := fetchLastAccount(ns, &s.scope)
+	if err != nil {
+		return 0, err
+	}
+	account++
+
+	// With the name validated, we'll create a new account for the new
+	// contiguous account.
+	if err := s.newAccountWatchingOnly(ns, account, name, pubKey); err != nil {
+		return 0, err
+	}
+
+	return account, nil
+}
+
+// newAccountWatchingOnly is similar to newAccount, but for watching-only wallets.
+//
+// NOTE: This function MUST be called with the manager lock held for writes.
+func (s *ScopedKeyManager) newAccountWatchingOnly(ns walletdb.ReadWriteBucket, account uint32, name string,
+	pubKey *hdkeychain.ExtendedKey) error {
+
+	// Validate the account name.
+	if err := ValidateAccountName(name); err != nil {
+		return err
+	}
+
+	// Check that account with the same name does not exist
+	_, err := s.lookupAccount(ns, name)
+	if err == nil {
+		str := fmt.Sprintf("account with the same name already exists")
+		return managerError(ErrDuplicateAccount, str, err)
+	}
+
+	// Encrypt the default account keys with the associated crypto keys.
+	acctPubEnc, err := s.rootManager.cryptoKeyPub.Encrypt(
+		[]byte(pubKey.String()),
+	)
+	if err != nil {
+		str := "failed to  encrypt public key for account"
+		return managerError(ErrCrypto, str, err)
+	}
+
+	// We have the encrypted account extended keys, so save them to the
+	// database
+	err = putAccountInfo(
+		ns, &s.scope, account, acctPubEnc, nil, 0, 0, name,
+	)
+	if err != nil {
+		return err
+	}
+
+	// Save last account metadata
+	return putLastAccount(ns, &s.scope, account)
+}
+
 // RenameAccount renames an account stored in the manager based on the given
 // account number with the given name.  If an account with the same name
 // already exists, ErrDuplicateAccount will be returned.
@@ -1700,6 +1782,7 @@ func (s *ScopedKeyManager) ForEachAccount(ns walletdb.ReadBucket,
 }
 
 // LastAccount returns the last account stored in the manager.
+// If no accounts, returns twos-complement representation of -1
 func (s *ScopedKeyManager) LastAccount(ns walletdb.ReadBucket) (uint32, error) {
 	return fetchLastAccount(ns, &s.scope)
 }

wallet/loader.go

@@ -100,6 +100,25 @@ func (l *Loader) RunAfterLoad(fn func(*Wallet)) {
 func (l *Loader) CreateNewWallet(pubPassphrase, privPassphrase, seed []byte,
 	bday time.Time) (*Wallet, error) {
 
+	return l.createNewWallet(
+		pubPassphrase, privPassphrase, seed, bday, false,
+	)
+}
+
+// CreateNewWatchingOnlyWallet creates a new wallet using the provided
+// public passphrase.  No seed or private passphrase may be provided
+// since the wallet is watching-only.
+func (l *Loader) CreateNewWatchingOnlyWallet(pubPassphrase []byte,
+	bday time.Time) (*Wallet, error) {
+
+	return l.createNewWallet(
+		pubPassphrase, nil, nil, bday, true,
+	)
+}
+
+func (l *Loader) createNewWallet(pubPassphrase, privPassphrase,
+	seed []byte, bday time.Time, isWatchingOnly bool) (*Wallet, error) {
+
 	defer l.mu.Unlock()
 	l.mu.Lock()
 
@@ -127,12 +146,19 @@ func (l *Loader) CreateNewWallet(pubPassphrase, privPassphrase, seed []byte,
 	}
 
 	// Initialize the newly created database for the wallet before opening.
+	if isWatchingOnly {
+		err = CreateWatchingOnly(db, pubPassphrase, l.chainParams, bday)
+		if err != nil {
+			return nil, err
+		}
+	} else {
 		err = Create(
 			db, pubPassphrase, privPassphrase, seed, l.chainParams, bday,
 		)
 		if err != nil {
 			return nil, err
 		}
+	}
 
 	// Open the newly-created wallet.
 	w, err := Open(db, pubPassphrase, nil, l.chainParams, l.recoveryWindow)

wallet/wallet.go

@@ -3579,9 +3579,30 @@ func (w *Wallet) Database() walletdb.DB {
 // Create creates an new wallet, writing it to an empty database.  If the passed
 // seed is non-nil, it is used.  Otherwise, a secure random seed of the
 // recommended length is generated.
-func Create(db walletdb.DB, pubPass, privPass, seed []byte, params *chaincfg.Params,
+func Create(db walletdb.DB, pubPass, privPass, seed []byte,
-	birthday time.Time) error {
+	params *chaincfg.Params, birthday time.Time) error {
 
+	return create(
+		db, pubPass, privPass, seed, params, birthday, false,
+	)
+}
+
+// CreateWatchingOnly creates an new watch-only wallet, writing it to
+// an empty database. No seed can be provided as this wallet will be
+// watching only.  Likewise no private passphrase may be provided
+// either.
+func CreateWatchingOnly(db walletdb.DB, pubPass []byte,
+	params *chaincfg.Params, birthday time.Time) error {
+
+	return create(
+		db, pubPass, nil, nil, params, birthday, true,
+	)
+}
+
+func create(db walletdb.DB, pubPass, privPass, seed []byte,
+	params *chaincfg.Params, birthday time.Time, isWatchingOnly bool) error {
+
+	if !isWatchingOnly {
 		// If a seed was provided, ensure that it is of valid length. Otherwise,
 		// we generate a random seed for the wallet with the recommended seed
 		// length.
@@ -3597,6 +3618,7 @@ func Create(db walletdb.DB, pubPass, privPass, seed []byte, params *chaincfg.Par
 			len(seed) > hdkeychain.MaxSeedBytes {
 			return hdkeychain.ErrInvalidSeedLen
 		}
+	}
 
 	return walletdb.Update(db, func(tx walletdb.ReadWriteTx) error {
 		addrmgrNs, err := tx.CreateTopLevelBucket(waddrmgrNamespaceKey)
@@ -3609,8 +3631,7 @@ func Create(db walletdb.DB, pubPass, privPass, seed []byte, params *chaincfg.Par
 		}
 
 		err = waddrmgr.Create(
-			addrmgrNs, seed, pubPass, privPass, params, nil,
+			addrmgrNs, seed, pubPass, privPass, params, nil, birthday,
-			birthday,
 		)
 		if err != nil {
 			return err

wallet/watchingonly_test.go

@@ -0,0 +1,34 @@
+// Copyright (c) 2018 The btcsuite developers
+// Use of this source code is governed by an ISC
+// license that can be found in the LICENSE file.
+
+package wallet
+
+import (
+	"io/ioutil"
+	"os"
+	"testing"
+	"time"
+
+	"github.com/btcsuite/btcd/chaincfg"
+	_ "github.com/btcsuite/btcwallet/walletdb/bdb"
+)
+
+// TestCreateWatchingOnly checks that we can construct a watching-only
+// wallet.
+func TestCreateWatchingOnly(t *testing.T) {
+	// Set up a wallet.
+	dir, err := ioutil.TempDir("", "watchingonly_test")
+	if err != nil {
+		t.Fatalf("Failed to create db dir: %v", err)
+	}
+	defer os.RemoveAll(dir)
+
+	pubPass := []byte("hello")
+
+	loader := NewLoader(&chaincfg.TestNet3Params, dir, true, 250)
+	_, err = loader.CreateNewWatchingOnlyWallet(pubPass, time.Now())
+	if err != nil {
+		t.Fatalf("unable to create wallet: %v", err)
+	}
+}