What is a Cryptographic Nonce?
Nonce is short for ‘number used once’. In blockchain, it is a number added to a hashed block. Miners on a Proof-of-Work (PoW) blockchain have to decode this number before they can earn the right to create the next block.
In PoW blockchains like Bitcoin, a core component of its security is the “hash”, numbers that are created and validated on the blockchain. Each block in a blockchain has data stored in it, and this data is secured via encryption in the form of “hashed” numbers. These numbers are stored on the block header along with other data, like the nonce.
Miners on the blockchain compete to be the first to decode the nonce. The nonce acts as a variable input during the hashing process, allowing miners to explore a vast space of possibilities to find a valid hash. It serves as a means of adjusting the inputs to the hash function until the desired output is achieved. The PoW algorithm requires miners to continuously search for a nonce value that, when combined with other block data, produces a hash with specific characteristics, such as a certain number of leading zeros.
Miners use nonce to calculate the block hash and then add it to the blockchain. The first miner to successfully find the variable number unlocks the block hash gets block reward and may also receive transaction fees included in the block they mined.
Most blocks are unlocked by mining pools because of the difficulty of finding the right nonce. A single miner’s hashing power may never be sufficient to do this alone, so most miners combine their computing capabilities in order to find the right hash and share the rewards for that block.