Mining Reward

A mining reward is what a miner actually collects for winning the right to add a block to a Proof of Work blockchain, paid out through a special first transaction in the block called the coinbase transaction. It has two moving parts: a fixed amount of newly issued coins set by the protocol, and the sum of every transaction fee attached to the transactions the miner chose to include.

On Bitcoin, the newly issued portion is called the block reward's subsidy, and it started at 50 BTC per block in 2009. Every 210,000 blocks, roughly every four years, a halving cuts that subsidy in half. Following the April 2024 halving, the subsidy sits at 3.125 BTC per block, with the next reduction to 1.5625 BTC expected around 2028. This step-down schedule continues until issuance reaches zero near the year 2140, after which miners on Bitcoin will be paid purely from transaction fees.

Fees typically make up a modest share of total miner revenue, roughly 10 to 15 percent under normal network conditions, though this share climbs sharply when the mempool backs up with pending transactions and users compete to have theirs confirmed first. Because miners naturally prioritize the highest-fee transactions, the fee market also shapes how quickly ordinary transfers get confirmed.

The predictable decline in the reward is central to the fixed-supply argument behind assets like Bitcoin: it enforces disinflation on a fixed schedule rather than leaving issuance to a central authority. It also creates a long-term economic question for network security, since the reward must eventually be replaced almost entirely by fee revenue to keep miners incentivized to protect the chain.