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What Is a Change Address and Why Is It Used in Bitcoin Transactions?

It is a new address used to receive unspent funds from a UTXO, enhancing privacy by preventing address linking.
Greeks.Live08.11.25

What Is a Change Address and Why Is It Used in Bitcoin Transactions?

A change address is a new address generated by the wallet to receive the remaining funds from a transaction. Since UTXOs must be spent entirely, if a user wants to send an amount smaller than the UTXO, the difference is sent back to the user's wallet as 'change.' Using a new change address (address rotation) enhances privacy and key hygiene by preventing the linking of the change to the original sending address.

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