Ethereum Series — Understanding Nonce

(source — beppegrillo.it)

The nonce is one of the most important and least understood component of an ethereum transaction.

As defined by Ethereum Yellow Paper, nonce is -

A scalar value equal to the number of transactions sent from this address or, in the case of accounts with associated code, the number of contract-creations made by this account.

As per the definition, nonce is a property of transaction originating address. It is not stored on the ethereum blockchain, but rather calculated by counting the number of transactions sent from an address.

An ethereum transaction is composed of following components —

{
  "nonce" : 'how many confirmed transactions this account has sent previously?',
 "gasPrice" : 'price of gas (in wei) the originator is willing to pay for this transaction',
 "to": 'recipient of this transaction(either smart contract or EOA)',
 "value": 'how much ether this transaction pays',
 "data": 'any binary data payload',
 "v,r,s": 'three components of ECDSA signature of originating account holder'
}