In a Bitcoin transaction, if the value of your inputs exceeds the amount you want to send, the network creates a “change” output that returns the excess funds back to you. Mycelium handles this automatically by generating a new change address from your HD wallet for every transaction. This is a critical privacy feature. If change were always sent back to the same address, it would easily link your transactions together. By sending change to a new address, the mycelium wallet helps obfuscate the flow of your funds on the blockchain. For users, this process is completely invisible and requires no action, but it is a fundamental part of what makes Mycelium a privacy-conscious wallet. Understanding that this is happening in the background helps users appreciate the wallet’s sophisticated design for preserving financial privacy.
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