Script Type Heuristic

The script type heuristic is a blockchain analysis technique that identifies the change output of a bitcoin transaction by comparing address formats. Wallets send change back to an address of their own kind, so if a transaction spends from native SegWit inputs and pays one native SegWit output and one legacy output, the matching SegWit output is probably the change.

Why it matters

Bitcoin uses several coexisting script formats, from legacy addresses beginning with 1 or 3 to bech32 SegWit and Taproot addresses beginning with bc1, and a typical transaction crosses formats whenever sender and receiver use different wallet software. Each crossing leaks information. Combined with the round amounts heuristic and input clustering, script type analysis lets surveillance firms follow a user's change chain through the ledger, turning pseudonymous addresses into linked wallet histories that persist forever.

How it works

The analyst inspects the script types of a transaction's inputs, which reveal the spending wallet's format, then checks each output against that format. An output matching the inputs while its sibling differs is scored as likely change, with confidence rising when other signals agree. The heuristic weakens as adoption of newer formats converges wallet behavior, and it can be defeated deliberately: some privacy-focused wallets match the change type to the payment type, and batch payments or collaborative transactions muddy the assumptions entirely. Like all chain analysis, it produces probabilities rather than proof.