diff --git a/src/lib.cairo b/src/lib.cairo
index 8abc785f..ce41db81 100644
--- a/src/lib.cairo
+++ b/src/lib.cairo
@@ -1,3 +1,5 @@
+pub mod utils;
+pub mod validation;
+
 mod state;
-mod validation;
 mod main;
diff --git a/src/utils.cairo b/src/utils.cairo
new file mode 100644
index 00000000..0e542db3
--- /dev/null
+++ b/src/utils.cairo
@@ -0,0 +1,36 @@
+use core::traits::Into;
+use core::traits::TryInto;
+
+// Bitwise shift left for u256
+pub fn shl(value: u256, shift: u32) -> u256 {
+    value * fast_pow(2.into(), shift.into())
+}
+
+// Bitwise shift right for u256
+pub fn shr(value: u256, shift: u32) -> u256 {
+    value / fast_pow(2.into(), shift.into())
+}
+
+// Fast exponentiation using the square-and-multiply algorithm
+// Reference:
+// https://github.com/keep-starknet-strange/alexandria/blob/bcdca70afdf59c9976148e95cebad5cf63d75a7f/packages/math/src/fast_power.cairo#L12
+pub fn fast_pow(base: u256, exp: u32) -> u256 {
+    if exp == 0 {
+        return 1_u256;
+    }
+
+    let mut res: u256 = 1_u256;
+    let mut base: u256 = base;
+    let mut exp: u32 = exp;
+
+    loop {
+        if exp % 2 == 1 {
+            res = res * base;
+        }
+        exp = exp / 2;
+        if exp == 0 {
+            break res;
+        }
+        base = base * base;
+    }
+}
diff --git a/src/validation.cairo b/src/validation.cairo
index 2b65e832..02501b68 100644
--- a/src/validation.cairo
+++ b/src/validation.cairo
@@ -1,4 +1,8 @@
 use super::state::{Block, ChainState, UtreexoState};
+use raito::utils::shl;
+use raito::utils::shr;
+
+const MAX_TARGET: u256 = 0x00000000FFFF0000000000000000000000000000000000000000000000000000;
 
 #[generate_trait]
 impl BlockValidatorImpl of BlockValidator {
@@ -70,6 +74,51 @@ fn validate_merkle_root(self: @ChainState, block: @Block) -> Result<(), ByteArra
     Result::Ok(())
 }
 
+
+pub fn target_to_bits(target: u256) -> Result<u32, felt252> {
+    if target == 0 {
+        return Result::Err('Target is zero');
+    }
+
+    if target > MAX_TARGET {
+        return Result::Err('Exceeds max value');
+    }
+
+    // Find the most significant byte
+    let mut size: u32 = 32;
+    let mut compact = target;
+
+    // Count leading zero bytes by finding the first non-zero byte
+    while size > 1 && shr(compact, (size - 1) * 8) == 0 {
+        size -= 1;
+    };
+
+    // Extract mantissa (most significant 3 bytes)
+    let mut mantissa: u32 = shr(compact, (size - 3) * 8).try_into().unwrap();
+
+    // Normalize
+    if mantissa > 0x7fffff {
+        mantissa = (mantissa + 0x80) / 0x100;
+        size += 1;
+    }
+
+    // Ensure the mantissa is only 3 bytes
+    mantissa = mantissa & 0xffffff;
+
+    // Check size doesn't exceed maximum
+    if size > 34 {
+        return Result::Err('Overflow');
+    }
+
+    // Convert size to u256
+    let size_u256: u256 = size.into();
+
+    // Combine size and mantissa
+    let result: u32 = (shl(size_u256, 24) + mantissa.into()).try_into().unwrap();
+
+    Result::Ok(result)
+}
+
 #[cfg(test)]
 mod tests {
     use super::{validate_target, validate_timestamp};
diff --git a/tests/tests.cairo b/tests/tests.cairo
new file mode 100644
index 00000000..76c15f51
--- /dev/null
+++ b/tests/tests.cairo
@@ -0,0 +1,66 @@
+use core::result::ResultTrait;
+use core::option::OptionTrait;
+use core::traits::Into;
+use raito::validation::target_to_bits;
+
+#[test]
+fn test_target_to_bits_large_target() {
+    let target: u256 = 0x1bc330000000000000000000000000000000000000000000;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x181bc330, "Incorrect bits for large target");
+}
+
+#[test]
+fn test_target_to_bits_small_target() {
+    let target: u256 = 0x92340000;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x05009234, "Incorrect bits for small target");
+}
+
+#[test]
+fn test_target_to_bits_medium_target() {
+    let target: u256 = 0x12345600;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x04123456, "Incorrect bits for medium target");
+}
+
+#[test]
+fn test_target_to_bits_max_target() {
+    let max_target: u256 = 0x00000000ffff0000000000000000000000000000000000000000000000000000;
+    let result = target_to_bits(max_target).unwrap();
+    assert!(result == 0x1d00ffff, "Incorrect bits for max target");
+}
+
+#[test]
+fn test_target_to_bits_high_precision_target() {
+    let target: u256 = 0x000000000d314200000000000000000000000000000000000000000000000000;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x1c0d3142, "Incorrect bits for high precision target");
+}
+
+#[test]
+fn test_target_to_bits_low_precision_target() {
+    let target: u256 = 0x00000000000000000007a4290000000000000000000000000000000000000000;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x1707a429, "Incorrect bits for low precision target");
+}
+
+#[test]
+fn test_target_to_bits_full_mantissa() {
+    let target: u256 = 0xd86a528bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8bc8b;
+    let result = target_to_bits(target).unwrap();
+    assert!(result == 0x1d00d86a, "Incorrect bits for full mantissa target");
+}
+
+#[test]
+fn test_target_to_bits_zero_target() {
+    let result = target_to_bits(0.into());
+    assert!(result.is_err(), "Should error on zero target");
+}
+
+#[test]
+fn test_target_to_bits_overflow_target() {
+    let target: u256 = 0x01000000000000000000000000000000000000000000000000000000000000000;
+    let result = target_to_bits(target);
+    assert!(result.is_err(), "Should error on overflow target");
+}