Block Reward

The block reward is the payment a miner collects for adding a valid block to the bitcoin blockchain. It has two parts: the block subsidy of newly created bitcoin, currently 3.125 BTC following the April 2024 halving, and the fees attached to the transactions included in the block. The subsidy halves every 210,000 blocks, roughly every four years.

Why it matters

The block reward is the engine of both bitcoin's issuance and its security. Every bitcoin in existence entered circulation as a block subsidy, so the reward schedule is the money supply schedule: 50 BTC per block in 2009, halving stepwise toward zero around the year 2140. It is also what pays for the network's defense, since miners spend real energy to compete for it. As the subsidy shrinks with each halving, transaction fees must carry a growing share of the security budget, a transition that is one of the most watched open questions in bitcoin's long-term design.

In the gold vs bitcoin debate

Gold has no equivalent of a declining block reward. A gold miner's payoff is whatever the market pays for however much metal can be profitably extracted, so high prices expand production. Bitcoin's reward is a protocol constant that falls on a published calendar regardless of demand, which means its new supply gets tighter precisely when interest is highest. Advocates frame this as monetary policy written in advance; skeptics note it makes the network's security increasingly dependent on a fee market that is still maturing. The reward is claimed in each block's first transaction, known as the coinbase transaction.