How Do Transaction Fees Incentivize Miners in PoW?
Transaction fees are small amounts of cryptocurrency attached to a transaction by the sender to prioritize its inclusion in the next block. These fees are collected by the miner who successfully validates and adds the block to the blockchain.
As the block reward decreases over time due to halving events, transaction fees become an increasingly important part of the miner's revenue. This financial incentive encourages miners to continue securing the network.
Glossar
Transaction Fees
Fee ⎊ Transaction fees, inherent in cryptocurrency, options, and derivatives markets, represent the cost of executing trades and utilizing network infrastructure.
Miners
Validation ⎊ Miners, within the cryptocurrency ecosystem, represent network participants who compete to bundle pending transactions into blocks, subsequently adding these blocks to the blockchain through computationally intensive processes.