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What is a change address?

In a UTXO-based cryptocurrency like Bitcoin, a change address is an address to which the remainder of a transaction's inputs are sent after the desired amount has been sent to the recipient. This is used to ensure that the transaction has the correct amount of inputs to match the outputs, and to prevent someone from tracing a transaction by examining the input and output amounts.

In Trezor Suite, change addresses are automatically generated and used when a transaction is created. When you send a transaction from your Trezor wallet, it will automatically select the necessary UTXOs and send the desired amount to the recipient address. Any remaining balance will be sent to a newly-generated change address in your wallet.

The change address process helps to maintain the privacy of your transactions. It also helps to improve the efficiency of the Bitcoin network, as it allows for the re-use of UTXOs rather than creating new ones for every transaction. Trezor Suite doesn't show change addresses generated by the account.

It is possible to see which change addresses were generated by the account using Electrum wallet.

How it works to improve privacy

For example, let's say you have a wallet with 10 bitcoins and you want to send 5 bitcoins to someone. Instead of sending 5 bitcoins directly to the recipient, your wallet will create a transaction that uses the 10 bitcoins in your wallet to pay the recipient 5 bitcoins and send the remaining 5 bitcoins back to you as change. This change will be sent to a new change address in your wallet.

Change addresses are used to improve privacy in UTXO-based cryptocurrencies. By using a new change address for each transaction, it becomes more difficult for outside parties to track the movements of your bitcoins or other cryptocurrency. When you connect your Trezor device to your computer and make a transaction, Trezor Suite automatically creates a new change address and uses it to receive the change from the transaction. This helps to ensure that your transactions are secure and private.
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