[Ethereum] Why are there no change addresses


What's the concept behind ethereum transactions that allows them not to require change addresses? What's the underlying difference compared to – for example – bitcoin?

Best Answer

The fundamental difference between Ethereum and Bitcoin is that while Bitcoin uses a UTXO model, Ethereum uses a state-transition model.

In Bitcoin, in order for a transaction to be valid, it must point to a set of Unspent Transaction Outputs, which then become the inputs for that transaction. The output value of the transaction must equal the sum of the inputs, so there will generally be change, which is deposited into a change account.

In Ethereum, every account simply has a balance, which increases when it recieves transactions, and decreases when it sends transactions. There is no need for change addresses, because all transactions simply deduct from one account and add to another, without needing to reference old transactions or spend quantized amounts.

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