When understanding how crypto mining works, one can get confused when faced with the nonce. The blockchain nonce is the key to solving the mathematical puzzle in a proof-of-work network and therefore acts a major role in adding blocks to the blockchain. This arbitrary number is the glue that holds crypto mining. So, it’s crucial to understand what it is, how it works, and the need for it.
The Need for Blockchain Nonce
Before we understand what a blockchain nonce is, we have to go over the process of crypto mining. In proof-of-work blockchains, such as Bitcoin, crypto mining is the process of verifying transactions and adding blocks to the digital ledger. Blockchains are operated on a peer-to-peer network where the ledger is distributed to thousands of nodes.
Since all nodes/miners verify transactions and group them into a candidate block, things can get chaotic. This is why a consensus was needed in order to create a sequence of blocks that get added to the blockchain.
In a proof-of-work blockchain, miners have to work in order to win the chance of getting their candidate block into the blockchain. The work is referred to the constant hashing and rehashing of a block in order to hit a target hash predetermined by the network. The variable number that miners have to alter to reach the target hash is the blockchain nonce.
So, What Is a Nonce?
The nonce is short for “number only used once”. It is a random 32-bit field that miners alter repeatedly until finding a nonce, that when hashed, results in a less than or equal to the target hash.
Consider the nonce like a dice with a finite number of guesses. Miners have to keep rolling the dice as many times as it takes to finally come to a number that generates the target hash.
There are two types of nonce values. It could either be random or sequential. The random nonce is produced randomly by jumping from an arbitrary number to the next arbitrary number. Sequential nonces however are produced incrementally. That means that the nonce starts at a certain number and gets gradually increasing by adding 1 in each trial. This type guarantees that values are not repeated.
The highest nonce anybody is able to achieve is 2³² (approximately 4 billion). If after 4 billion iterations of the nonce don’t result in a solution, miners will get stuck. This has a solution of adding an extra nonce in the blockchain block, but that’s a different story. Let’s stick with the fact that guessing the nonce repeatedly will always generate a solution.
How Does a Nonce Work in Mining?
In crypto mining, miners gather transactions, verify them, hash them into one Merkleroot, and add them to a candidate block. The network generates the target hash in which miners have to reach a less than or equal value in order to “win” the proof-of-work protocol.
Since the data in a block cannot be changed, the only variable left to alter in order to produce a valid hash is the nonce. Miners have to keep hashing the block by changing the nonce repeatedly until reaching the target hash (or a value smaller than).
Miners will start with “0” and gradually adds 1 to reach the desired target. The first miner to find a nonce number that results in a valid hash is granted the right to add its block to the blockchain and is therefore rewarded.
Guessing the right blockchain nonce value is a repetitive and monotonous process. It gets trickier when the mining difficulty becomes higher. The mining difficulty refers to the number of zeros the block hash has to hit that mirror the target hash. For example, if the target hash starts with 4 zeros, the block hash has to start with exactly 4 zeros.
The more zeros it requires, the higher the difficulty is to find a correct block hash. Finding a value that starts with 3 zeros for instance is much easier than finding a value with 7 zeros. Here miners have to put extra effort into guessing the nonce value.
The Importance of the Blockchain Nonce
So, we’ve seen how the blockchain nonce plays a crucial role in proof-of-work crypto mining. Proof-of-work mining always refers to “solving complex computational puzzles”, however, it is just a game of guessing the right nonce to hit the target hash.
However, that being said, the difficulty of generating a valid nonce depends on many factors. Factors such as the size of the blockchain, how many nodes are participating, and the actual mining hardware efficiency. Solving for the nonce hence requires trial and error. However, the first miner to guess the right value gets the chance to add the block to the blockchain.