What is the block reward?
The block reward is the fixed amount of newly created bitcoin a miner earns for successfully mining a new block. The primary way new bitcoin enters circulation. As of 2024: 3.125 BTC per block. Combined with transaction fees, it forms the total incentive for miners to secure the network.
Why It Matters
The block reward is Bitcoin's monetary policy in action. Unlike fiat currencies where central banks can print unlimited money, Bitcoin's issuance follows a predictable, transparent schedule. Every 210,000 blocks (roughly every four years), the reward is cut in half. This is the halving. The rate of new bitcoin creation slows over time. By 2140, all 21 million bitcoin will be mined. After that, miners rely entirely on transaction fees.
How It Works
When a miner finds a valid block, they include a special transaction called the coinbase transaction (not to be confused with the exchange). This transaction has no inputs. It creates new bitcoin out of thin air, up to the current block reward amount. The miner sends this reward to their own address.
The block reward started at 50 BTC when Bitcoin launched in 2009. After four halvings (2012, 2016, 2020, 2024), it now stands at 3.125 BTC. The next halving, expected around 2028, will reduce it to 1.5625 BTC. The schedule continues until the reward effectively reaches zero somewhere around the year 2140, when the last fraction of a satoshi gets issued and the network transitions completely to fee-based miner compensation.