Block Reward

What is a Block Reward?

As a miner, you are awarded a block reward when you correctly validate a new block. Both the block subsidy and the transaction fees are part of the block reward. The majority of a block reward is made up of freshly created coins, which make up the block subsidy. All of the fees paid by the transactions included in the block form the remainder.

Many people talk about the block subsidies as the block reward because the block reward is almost entirely made up of the block subsidies. As a result, the fees are omitted from the term "block reward" in common usage.

At 50 BTC, the block subsidy for Bitcoin began and is being lowered in half every 210,000 blocks (approximately once every four years). The halving of Bitcoin is the term for this procedure. After a reduction of 22.5 BTC in 2016, Bitcoin's block subsidy was cut to 12.5 BTC in 2012. In May 2020, the next halving is planned to take place.

This transaction is called a coinbase transaction, and it generates new coins. If a coinbase transaction is the first in a block, it creates coins from scratch by taking one blank input and adding it to the block.