How Do Transaction Fees Factor into the Total Reward for a Successful Miner?
The total reward for a successful miner who solves a block consists of two parts: the fixed block subsidy (newly minted coins) and the sum of all transaction fees included in that block. As the block subsidy periodically decreases (halving), transaction fees become an increasingly important component of the total reward.
Miners prioritize transactions with higher fees, which is a mechanism that helps clear the mempool.
Glossar
Transaction Fees
Fee ⎊ Transaction fees, inherent in cryptocurrency, options, and derivatives markets, represent the cost of executing trades and utilizing network infrastructure.
Block Subsidy
Genesis ⎊ Block subsidy, within cryptocurrency networks, represents the initial allocation of newly minted coins to miners or validators as a reward for processing transactions and securing the blockchain.
Successful Miner
Action ⎊ A Successful Miner is a network participant who has completed the computationally intensive Action of finding a valid hash for a new block, thereby earning the right to append that block to the blockchain.
Block Size Limit
Constraint ⎊ Block size limit, within cryptocurrency networks, fundamentally dictates the maximum data volume permitted within a single block added to the blockchain.