The block subsidy is a core part of Bitcoin’s monetary policy. At the start, miners received 50 BTC per block, and this amount gets cut in half roughly every four years (210,000 blocks). Over time, these halvings lead to a diminishing rate of new Bitcoin issuance, ensuring that the total supply will never exceed 21 million.

Currently, transaction fees serve as a secondary incentive, supplementing the subsidy. In the future, as the subsidy asymptotically approaches zero, fees alone should incentivize miners to continue securing the network. By design, this mechanism mimics a deflationary model, making BTC scarcer and potentially more valuable as adoption grows.