What is a change address?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
On UTXO chains, funds can only be spent whole. The difference between what you spend and what you send is returned to you as change, at a separate address. Being able to tell which output is the change reveals an address belonging to the sender, which makes it a central privacy issue.
Key points
- A UTXO cannot be split; it is spent whole and the rest returned
- Change goes to a fresh address that you control
- Identifying the change exposes another address of the sender
- Odd amounts and format mismatches are the usual tells
Definition
An address the sender controls, used to receive the remainder after the spent amount and the fee are deducted from the inputs on a UTXO chain. Most wallets generate a fresh one automatically.
On Bitcoin and similar chains, each previously received amount sits as its own discrete lump. To send 0.3 BTC out of a 1 BTC lump you cannot slice it: you spend the whole 1 BTC and create two outputs, 0.3 BTC to the recipient and the rest, minus the fee, back to yourself.
That second output is the change. Wallets normally generate a fresh address for it automatically. From the user's side the balance simply went down; on the ledger it appears as a sizeable amount arriving at an address nobody has seen before.
For an analyst, deciding which of the two outputs is the change is a key task. Tells include one output having an awkward, unrounded amount, or one output using the same address format as the inputs while the other does not. Guess right and that address is attributed to the sender, and the trail continues into the next transaction.
Watch out for
- · Change is still your money, so confirm your backup covers those addresses
- · Hand-built transactions that get outputs wrong can lose the change to fees
- · Sending round numbers makes the unrounded change output easier to spot