Block Reward

Block reward combines a fixed subsidy of newly created coins with any transaction fees collected from the transactions bundled into a block, paid to whichever miner or validator successfully adds that block to the chain.

On Bitcoin, the subsidy started at 50 BTC per block in 2009 and is cut in half roughly every four years, an event known as the halving. Following the April 2024 halving, the reward dropped to 3.125 BTC per block, with the next reduction to 1.5625 BTC expected around 2028. Because Bitcoin's total supply is capped at 21 million coins, this shrinking subsidy produces a predictable, disinflationary emission rate, with the final coin not expected to be mined until roughly the year 2140.

Block rewards do more than pay miners: they fund network security. Under proof-of-work, miners commit real computing power and electricity, and the reward compensates that cost while making an attack on the chain economically irrational. As the fixed subsidy keeps shrinking, transaction fees are expected to make up a larger share of total miner income over time, a trend already visible during periods of high network congestion.

Not every blockchain works this way. Proof-of-stake networks such as post-Merge Ethereum replace mining rewards with smaller, more frequent validator rewards for proposing and attesting to blocks, since securing the network no longer depends on competing computing power.