bip44 account discovery

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In Bip44 "Account Discovery" section, there is following sentence:

We scan just the external chains, because internal chains receive only coins that come from the associated external chains. (https://github.com/bitcoin/bips/blob/master/bip-0044.mediawiki#address-gap-limit)

I do not understand it. If I do not scan internal chain, how will I find the change addresses? Yes, change address will exist in transaction output of public (external) addresses, but I can not find out which output address is change address as it can be real receiver address. Thanks for help.

Cem Karay

Posted 2017-12-25T22:23:36.693

Reputation: 77

Answers

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In terms of "Accounts discovery" algorithm, it is not needed to get internal addresses. We just sequentially take receiver addresses of an account and check whether one of them was used in any transaction. Literally: we get a transaction and check whether receiver address is in the set of target addresses of looking transaction.

This is so because if there is a change address in the transaction then there is a receiver address mandatory. It allows us to skip checking of change addresses for this task.

Nikita

Posted 2017-12-25T22:23:36.693

Reputation: 25