Block Reward

A block reward is the payment a miner or validator receives for successfully adding a new block to a blockchain, typically consisting of two parts: newly created coins (the block subsidy) and the fees attached to the transactions included in the block. It is the core economic incentive that pays for network security — people spend money on hardware, electricity, or staked capital because producing blocks pays.

The subsidy portion is also how many cryptocurrencies issue their supply. Bitcoin is the clearest example: the reward started at 50 BTC per block in 2009 and halves every 210,000 blocks (roughly four years), dropping to 3.125 BTC at the April 2024 halving, a schedule that enforces the 21 million coin cap. On proof-of-stake Ethereum, block proposers instead earn newly issued ETH for validation duties plus priority fees and sometimes extra value from transaction ordering, while the base portion of each fee is burned rather than paid out.

A common misconception is that transaction fees and the block reward are separate income streams a miner chooses between; fees are simply collected as part of the same block, and on Bitcoin they are designed to gradually replace the shrinking subsidy as the long-term security budget. Whether fees alone will eventually be enough to keep miners securing Bitcoin once the subsidy becomes negligible — sometime in the next century — is one of the open economic questions in the field.