Why Is the Nonce Limited to 32 Bits and What Happens When It Is Exhausted?

The nonce field in the Bitcoin block header is 32 bits, allowing for over 4 billion possible values. This limit was chosen for simplicity and historical reasons.

When miners exhaust all 32-bit nonce values for a given block header configuration, they must modify the 'extranonce' field, which is part of the Coinbase transaction, to generate new Merkle Roots. This changes the block header entirely, allowing the nonce search to start over.