Change Address
An Unspent Transaction Output (UTXO)An unspent transaction output (UTXO) is an abstraction of el... More system like BitcoinThe term "Bitcoin" can either refer to Bitcoin the network, ... More treats crypto similarly to physical cash. Let’s imagine a scenario in which Bob has 2 Bitcoins and wants to give Alice 1.75 bitcoin. Bob’s walletA device, physical medium, program or service whose sole pur... More first unlocks his UTXO of 2 bitcoins and uses this whole 2 bitcoin UTXO as input to the transaction. Assuming that this transaction had a .05 BTC transaction fee associated with it, it would send 1.75 bitcoin to Alice’s addressAn address is a cryptographic key that "owns" bitcoins. This... More, and the remainder of 0.20 bitcoin is sent back to Bob as change in the form of a new UTXO. Depending on Bob’s wallet, this change may be sent back to his original address or to a newly-created “change” address (owned by Bob). Understanding where change goes is important for a “follow the money/follow the coins” transaction tracing model, like the one employed by CipherTrace. CipherTrace shows these “Change Addresses” in the Graph Explorer view of our Inspector tool. This notion of Change addresses can be vital to an investigation because it can identify other addresses belonging to the sender.