What Is a Block Reward in Cryptocurrency Mining?
A block reward is the amount of new cryptocurrency a miner or mining pool receives for successfully adding a new block of verified transactions to the blockchain. It typically consists of newly minted coins plus the transaction fees from the included transactions.
This reward incentivizes miners to dedicate computing power to secure the network. The reward amount is often subject to periodic reductions, like Bitcoin's halving event.
Glossar
Block Reward
Incentive ⎊ A block reward serves as the primary economic incentive for miners or validators to participate in securing a blockchain network.
Bitcoin Halving
Halving ⎊ Bitcoin Halving is the programmed event occurring roughly every four years where the block reward granted to miners for validating transactions is programmatically cut in half, directly impacting the inflation schedule and new supply injection rate.
Newly Minted Coins
Generation ⎊ Newly Minted Coins represent the discrete units of a cryptocurrency created at a specific point in time, usually as a reward for block production or through a predefined minting function.
Consensus Mechanism
Validation ⎊ Consensus mechanisms, within cryptocurrency, represent the procedural logic ensuring state agreement across a distributed network, critical for preventing double-spending and maintaining data integrity; their design directly impacts network security and scalability, influencing transaction throughput and finality times, particularly relevant in decentralized finance applications.
Transaction Fees
Cost ⎊ Transaction fees represent a quantifiable expense incurred for processing and validating transactions across diverse financial systems, functioning as a critical component of network participation and security.