Understanding Change in Cryptocurrency Transactions

Regarding cryptocurrencies like Bitcoin (BTC), the concept of “change” plays a crucial role in transactions.

Bitcoin and several other cryptocurrencies operate on the unspent transaction outputs (UTXO) model.

In this model, transactions consist of inputs and outputs.

When a user intends to send coins to someone, they provide information to the network.

The network then processes the transaction and generates outputs, which can be used as inputs for future transactions.

Bitcoin Address Balances and Unspent Outputs in Transactions

Contrary to what one might expect, the balance of a Bitcoin address does not represent a specific number of coins stored on it.

Instead, it comprises a collection of unspent outputs from previous transactions. @When you send Bitcoin, you must send them as a whole output, with the remainder being returned as change.