Glossary

Block Reward

Plain-language definition Crypto glossary

Key takeaways

A block reward is the payment a miner or validator receives for successfully adding a new block to a blockchain, and it is the main incentive that keeps a network secure.
The reward usually has two parts, the newly issued coins known as the subsidy and the transaction fees paid by users whose transactions are in the block.
Block rewards are how new coins enter circulation, and on capped-supply chains the subsidy shrinks over time, so transaction fees are expected to make up a larger share of the reward.

Definition

A block reward is the payment a miner or validator receives for successfully adding a new block to a blockchain. It is the main incentive that keeps a network secure.

How it works

The reward usually has two parts: newly issued coins (the “subsidy”) and the transaction fees paid by users whose transactions are in the block. On proof-of-work chains the reward goes to the miner who solves the block; on proof-of-stake chains it goes to the chosen validator. On many networks the subsidy shrinks over time — on Bitcoin it halves at fixed intervals.

Why it matters

Block rewards are how new coins enter circulation and how networks pay for their own security. As the issued portion declines on capped-supply chains, transaction fees are expected to make up a larger share of the reward over time.

Example

When a miner adds a Bitcoin block, they receive the current coin subsidy plus the fees from the transactions it contains.

FAQ

Frequently asked questions

What are the two parts of a block reward?

A block reward usually consists of newly issued coins, called the subsidy, plus the transaction fees paid by users whose transactions are included in the block. On proof-of-work chains the reward goes to the miner who solves the block, while on proof-of-stake chains it goes to the chosen validator. Together these payments incentivize securing the network.

Why does the block reward shrink over time?

On many capped-supply networks, the newly issued portion of the reward is reduced at set intervals, and on Bitcoin it halves at fixed points. This controls how new coins enter circulation and keeps issuance predictable. As the subsidy declines, transaction fees are expected to make up a larger share of the reward.

How do block rewards keep a network secure?

Block rewards pay miners or validators for the work or capital they commit to adding blocks, giving them a financial incentive to participate honestly. This ongoing payment is how networks fund their own security without a central authority. If rewards were too low, fewer participants would secure the network.