When searching for a block, the miner hashes the transactions along with other block data and modifies the nonce and block timestamp to generate different hash outputs.

The hashing function used is SHA-256, which produces a 256-bit hash.

The network difficulty (currently 119T) determines how small the hash must be in order to successfully mine a block.

The formula is super simple:

2²⁵⁶ (SHA-256 produces a 256-bit output) ÷ Network difficulty (119T) -> 1,190,000,000,000

Conclusion:

• The higher the network difficulty, the smaller the block hash must be to be considered valid.
• This explains why the number of leading zeros in the block hash increases as difficulty rises.
• For example, in binary (or hexadecimal which is the block hash):
  • 0001 is smaller than 0100.

The total number of possible SHA-256 hashes is 2²⁵⁶, which is such a huge number that finding a hash smaller than 2²⁵⁶ / 119T is practically impossible.