What is a nonce, the heart of blockchain security
Of CNBCTV18.com IST (published)
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The word nonce is short for ‘number used only once.’ It may sound like a simple concept, but the use cases range from small transactions to space stations. In finance and cryptography, a nonce refers to a randomly generated number, and it is used to verify transactions or perform security checks.
Three things make cryptocurrencies unique: decentralization, scalability and security. First, cryptos can function without a central governing body. They can also scale enough to challenge fiat currencies. And finally, they use one of the highest forms of security available to humanity: cryptographic encryption. In this article, we will learn about a concept at the heart of blockchain security – the non-it – what it is and how it is used in crypto.
What is a nonce?
The word nonce is short for ‘number used only once.’ It may sound like a simple concept, but the use cases range from small transactions to space stations. In finance and cryptography, a nonce refers to a randomly generated number, and it is used to verify transactions or perform security checks.
For example, the captchas we often find on websites are nonces (albeit with letters included) as they are only used once. In a much simpler case, even the OTPs sent to confirm transactions are nonces that have the singular use of verifying something for a limited period of time.
What is the use of a nonce in blockchain?
Within several proof-of-work blockchains, including Bitcoin, a nonce is a random 32-bit number that miners use as the basis for their hash calculations. Miners compete with each other and try to guess a valid nonce when trying to calculate a block hash.
A block hash is like a reference number for a block in the blockchain. This reference number must meet certain requirements, i.e. it must begin with a specific number of zeros. Bitcoin miners perform a staggering number of hash functions with many different nonce values until a valid output is produced.
The first miner to find a nonce that results in a valid block hash gets to add the next block to the blockchain and is rewarded for doing so.
Miners use a trial-and-error approach, where each calculation takes a new non-value. Blockchains use this method as the probability of guessing a valid nonce is close to zero. Therefore, miners must have advanced computer systems to test and discard millions of different nonce possibilities to calculate a valid block hash. The nonce that results in a valid block hash is known as a golden nonce.
Note that since it is a 32-bit number, a nonce can have more than 4 billion possibilities. Also, the inclusion of an “extra nonce” creates room for a much longer number, one that could have tens of billions of combinations.
Of course, as the number of miners increases over time, the rate of finding a nonce and calculating a valid block hash will necessarily increase. Therefore, the mining difficulty is adjusted to keep the block time consistent, which is around 10 minutes for Bitcoin.
To do this, the protocol will adjust the number of zeros in the block hash, thereby changing the nonce requirements and keeping miners on their toes. The process of trying different nonces until a valid hash is found constitutes the “work” in the proof-of-work consensus mechanism.
Conclusion
Therefore, as you can see, a nonce is at the heart of the PoW consensus mechanism. Without the right nonce, it is impossible to add new blocks to the blockchain. It is also a great way to secure the network and build trust among users.
