Why is the change address for a transaction the same as the originator address?

Question

I was under the impression that if address abc has 100 BTC assigned to it, and it pays address def 20 BTC, 80 BTC will be transferred from abc to a new address ghi. But in this transaction:

https://blockchain.info/tx/15bf8b35c9210efe7e448c5fc6b69b47b3a8cac9c148c7cc57c65f266384d9b8

The change address is the same as the originator. Why is that?

Answer 1

Many wallets let you control where to send the change. In most cases it is advisable to send to a new address to reduce traceability and increase your privacy a little, but not everyone does and sometimes it makes sense not to do it. Most modern wallets will create a new address automatically unless you stop them.

Bad reasons to send change to the same address

• Fees. Some people think that they will pay less fess if all their funds are in the same address. That is not the case, fees are determined by number of inputs (and age, signatures and outputs), not addresses. 1 BTC in address A and another one in address B will cost to send the same than 2 BTC in two different inputs in adress A
• Convenience. Some people think that having many addresses is more difficult to manage. This is wrong, all wallets will do this automatically.

Good reasons to send change to the same address

• Multisignature addresses (those that need several parties signing transactions). Those work in a different way than regular addresses and don't "live" in a wallet. Users need to create them one by one, usually for very good reasons (like needed two signatures to pay with shared money) and sending change to a new non multisignature address would defeat their purpose.
• Accountability. If someone publishes an address so others can check what he does with the funds it makes sense to always send the change there so it is easier for those who check.

Answer 2

Bitcoin Core sends change to a different address, but the Bitcoin protocol does not require that. You can write a Bitcoin client that sends the change to the original address.

There's no benefit to sending your change to the original address; it does not provide lower fees or faster transactions.