What Is the ‘Block Subsidy’ and How Is It Reduced over Time?

The block subsidy is a reward of newly minted cryptocurrency that is included in the coinbase transaction of every successfully mined block. It is a fundamental part of the coin's monetary policy and the primary way new coins enter circulation.

In Bitcoin, the subsidy is reduced over time through a process called "halving." This event occurs approximately every four years or every 210,000 blocks, cutting the subsidy amount exactly in half. This programmed reduction is designed to control inflation and ensure a finite supply of the cryptocurrency.