Block Reward
The incentive miners receive for finding a valid block, comprising the block subsidy plus transaction fees.
The block reward is the total compensation a miner receives for finding a valid block. It has two parts:
- The block subsidy - newly issued BTC, currently 3.125 per block, halved every 210,000 blocks until it reaches zero around 2140.
- Transaction fees - the sum of fees from every transaction the miner chose to include in the block. Variable; depends on mempool conditions.
Both parts are paid to the miner via the coinbase transaction, the special first transaction in every block. In Bitcoin's early years the subsidy was nearly all of the reward (transactions were essentially free). Today fees usually contribute 3-10%, with occasional spikes when the mempool is congested.
The long-term economic question for Bitcoin's security is whether fees can fully replace the shrinking subsidy. So far the trend is consistent with the design - per-byte fees keep rising as Bitcoin's usage matures. See Mining rabbit hole §5 for the long version.
Key takeaways
- Combines new BTC (subsidy) and user-paid fees
- Halving events reduce the subsidy every 210k blocks
- Ensures a steady incentive for miners to secure the network