Block Reward
A block reward is what a miner receives for producing a new valid block: newly created coins (the block subsidy) plus, in most usage, the transaction fees paid by the users in that block.
Where the reward comes from
In a proof-of-work blockchain such as Bitcoin, miners compete to find a valid block. The winner includes a special first transaction, called the coinbase transaction, that pays itself new coins. Those coins did not exist before, so the block reward is also how new supply enters circulation.
On top of the new coins, the winning miner collects the fees attached to every transaction it put in the block. Strictly speaking the new coins are the block subsidy and the fees are separate, but people often say block reward for the total payout.
How Bitcoin's reward shrinks over time
Bitcoin's rules cut the subsidy in half every 210,000 blocks, roughly every four years. It started at 50 BTC in 2009, fell to 25, then 12.5, then 6.25, and the fourth halving, in April 2024, cut it to 3.125 BTC. Because of this schedule the total supply approaches but never exceeds 21 million BTC.
Once the subsidy becomes tiny, fees are meant to carry most of the incentive for miners. Whether fees alone will pay for enough security is an open debate.
An example
Say a miner finds a block that contains 2,000 transactions paying 0.25 BTC in fees altogether. With a subsidy of 3.125 BTC, the coinbase transaction pays the miner 3.375 BTC. These coins cannot be spent until 100 more blocks have been added, a rule that protects against blocks later being dropped.
Why it matters
The block reward is the incentive that makes honest mining worthwhile. Miners spend real money on hardware and electricity, and the reward is what they earn for securing the network. It also explains Bitcoin's predictable issuance: anyone can calculate how many new coins will exist at any future block height. Proof-of-stake chains pay validators in a similar way, but the rewards come from staking issuance and fees rather than from mining.
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Frequently asked questions
What is the current Bitcoin block reward?
Since the April 2024 halving the subsidy is 3.125 BTC per block, plus whatever fees the block contains. The next halving will cut it to 1.5625 BTC.
What happens when all bitcoins are mined?
Around the year 2140 the subsidy reaches zero. Miners will then earn only transaction fees.
Is the block reward the same as a staking reward?
They play a similar role, but a block reward pays miners who spend computing power, while staking rewards pay validators who lock up coins as collateral.
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