What is a block reward?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A block reward is what the producer of a block receives: newly issued coins plus the fees of the transactions inside it. Bitcoin halves the issued portion every 210,000 blocks, and the 2024 halving took it to 3.125 BTC per block. Over time, fees are designed to matter more.
Key points
- The sum of newly issued coins and transaction fees
- Bitcoin halves the issued portion every 210,000 blocks
- The 2024 halving set it at 3.125 BTC
- Nothing is paid for a block that the chain discards
Definition
The compensation received by whoever produces a block, consisting of newly issued coins defined by the protocol plus the fees from the transactions it contains.
Bitcoin's issuance began at 50 BTC per block and halves every 210,000 blocks: 25 in 2012, 12.5 in 2016, 6.25 in 2020 and 3.125 in 2024. Repeating that schedule caps total issuance at roughly 21 million BTC.
The reward is recorded in a special coinbase transaction inside the block. It has no inputs and may pay out up to the protocol's limit to any address the producer chooses. Transaction fees are collected there too, so busier periods mean a larger total per block.
Proof-of-stake Ethereum works differently. New issuance is paid to validators, while the base portion of transaction fees is burned under EIP-1559. A proposer keeps the priority fee plus rewards for proposing and attesting.
Watch out for
- · Only blocks that stay on the chain pay out; a discarded block earns nothing
- · On Bitcoin, coinbase rewards cannot be spent until 100 blocks have passed
- · The coin amount is fixed by rule, but its value in fiat is not — do not treat it as guaranteed income