diff --git a/src/wallet.js b/src/wallet.js
index 0af210d..995a823 100644
--- a/src/wallet.js
+++ b/src/wallet.js
@@ -23,6 +23,7 @@ var Wallet = function (seed, options) {
 
     // Addresses
     this.addresses = [];
+    this.changeAddresses = [];
 
     // Transaction output data
     this.outputs = {};
@@ -38,21 +39,24 @@ var Wallet = function (seed, options) {
     }
     this.newMasterKey(seed, network)
 
-    // HD first-level child derivation method (i.e. public or private child key derivation)
-    // NB: if not specified, defaults to private child derivation
-    // Also see https://bitcointalk.org/index.php?topic=405179.msg4415254#msg4415254
+    // HD first-level child derivation method should be private
+    // See https://bitcointalk.org/index.php?topic=405179.msg4415254#msg4415254
     this.accountZero = masterkey.derivePrivate(0)
     this.externalAccount = this.accountZero.derive(0)
     this.internalAccount = this.accountZero.derive(1)
 
-    // Add a new address
     this.generateAddress = function() {
-        var key = this.externalAccount.derive(keys.length)
-        keys.push(key); // consider removing this and derive on-demand for simplified encrypted keychain
+        var key = this.externalAccount.derive(this.addresses.length)
         this.addresses.push(key.getBitcoinAddress().toString())
         return this.addresses[this.addresses.length - 1]
     }
 
+    this.generateChangeAddress = function() {
+        var key = this.internalAccount.derive(this.changeAddresses.length)
+        this.changeAddresses.push(key.getBitcoinAddress().toString())
+        return this.changeAddresses[this.changeAddresses.length - 1]
+    }
+
     // Processes a transaction object
     // If "verified" is true, then we trust the transaction as "final"
     this.processTx = function(tx, verified) {
diff --git a/test/wallet.js b/test/wallet.js
index 0f6747c..39a8500 100644
--- a/test/wallet.js
+++ b/test/wallet.js
@@ -52,12 +52,26 @@ describe('Wallet', function() {
   })
 
   describe('generateAddress', function(){
-    var wallet;
-    beforeEach(function() { wallet = new Wallet(seed, {network: 'testnet'}) })
+    it('generate receiving addresses', function(){
+      var wallet = new Wallet(seed, {network: 'testnet'})
+      var expectedAddresses = [
+        "n1GyUANZand9Kw6hGSV9837cCC9FFUQzQa",
+        "n2fiWrHqD6GM5GiEqkbWAc6aaZQp3ba93X"
+      ]
 
-    it('defaults to generating receiving addresses', function(){
-      assert.equal(wallet.generateAddress(), "n1GyUANZand9Kw6hGSV9837cCC9FFUQzQa")
-      assert.equal(wallet.generateAddress(), "n2fiWrHqD6GM5GiEqkbWAc6aaZQp3ba93X")
+      assert.equal(wallet.generateAddress(), expectedAddresses[0])
+      assert.equal(wallet.generateAddress(), expectedAddresses[1])
+      assert.deepEqual(wallet.addresses, expectedAddresses)
+    })
+  })
+
+  describe('generateChangeAddress', function(){
+    it('generates change addresses', function(){
+      var wallet = new Wallet(seed, {network: 'testnet'})
+      var expectedAddresses = ["mnXiDR4MKsFxcKJEZjx4353oXvo55iuptn"]
+
+      assert.equal(wallet.generateChangeAddress(), expectedAddresses[0])
+      assert.deepEqual(wallet.changeAddresses, expectedAddresses)
     })
   })
 })