What is Change?
Let's find out Change meaning, definition in crypto, what is Change, and all other detailed facts.
Change is a concept related to the unspent transaction outputs (UTXO) cryptocurrency model. Based on this model, transactions with various cryptocurrencies, including Bitcoin (BTC), consist of inputs and outputs.
If a person wishes to send a certain amount of cryptocurrency to another user, they cannot simply send that amount. Instead, they feed inputs to the network. The input determines where the cryptocurrency is being sent from. The network that processes the transaction produces outputs. These outputs can be used for new transactions as inputs.
During a transaction, the user can only send their cryptocurrency in a whole output. The remaining crypto is sent back to the wallet as change. The overall balance of a crypto address is made up of unspent outputs from prior transactions.
For example, user A has a Bitcoin address with unspent outputs of 20 BTC and wishes to transfer 5 BTC to user B. User A has to send all 20 BTC as the new transaction input to the network. The network then destroys the input and instead creates three separate outputs that total to the amount of the initial input:
- An output of 5 BTC that will be sent to user B;
- The so-called miner fee as payment for processing the transaction
- The remaining 15 BTC minus the miner fee to return to user A’s wallet.
The latter input of 15 BTC minus miner fee is the change. It can then be used as an input in the future if the user wishes to proceed with new transactions.