Blockchain & Cryptocurrency Glossary

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Block Reward

1 min read
Pronunciation
[bläk ree-wôrd]
Analogy
A block reward is like a bonus paycheck given to the first salesperson who closes a deal in a day; it motivates participants to contribute resources to secure the network.
Definition
The incentive—usually in native cryptocurrency—granted to the miner or validator who successfully produces and appends a new block to the blockchain.
Key Points Intro
Block rewards consist of two components:
Key Points

Base reward: Fixed amount of new coins minted per block.

Transaction fees: Sum of fees from all transactions included in the block.

Halving events: Some networks periodically reduce the base reward.

Economic incentive: Aligns participant interests with network security.

Example
On Bitcoin, the base reward was 6.25 BTC per block as of 2025; miners also collect the ≈0.5 BTC in transaction fees included by users.
Technical Deep Dive
Consensus rules specify a subsidy field in the coinbase transaction equal to the current base reward plus total input fees. Full nodes validate that block producers do not claim more than the allowed amount. In UTXO chains, the coinbase output creates new tokens up to this limit.
Security Warning
Overreliance on transaction fees as block rewards decline can increase fee volatility and impact user costs.
Caveat
Base rewards decrease over time; long‑term security depends increasingly on fees, which may be unpredictable.
Related Terms
Coinbase Transaction
Halving
Emission Schedule

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