What Is Block Reward?
Also known as: Block Subsidy, Mining Reward, Coinbase Reward
In short
A block reward is the cryptocurrency reward given to the miner or validator who adds a new block to a blockchain network. It generally consists of newly minted coins (the block subsidy) and the fees of the transactions in the block.
In Proof of Work networks, the block reward incentivizes miners to keep the network secure by covering their hardware and electricity costs. In Bitcoin, the first transaction in each block, the coinbase transaction, transfers the new bitcoins and the transaction fees in the block to the miner. This mechanism is also the only way new bitcoins enter circulation.
In Bitcoin, the block subsidy was initially 50 BTC and is cut in half every 210,000 blocks: it dropped to 25 in 2012, 12.5 in 2016, 6.25 in 2020 and 3.125 BTC in 2024. This process will continue until about the year 2140, after which miners will be rewarded only with transaction fees. In Proof of Stake networks, rewards are distributed according to the amount staked and the validator's performance of its duties; on Ethereum, validators can earn priority fees and MEV revenue in addition to protocol rewards.
As the block subsidy declines, whether network security can be funded in the long term by transaction fees alone is a debated topic in the Bitcoin community. The market value of the block reward directly affects the profitability of mining; a halving of the reward can cause inefficient miners to leave the network.
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