What Is a Block Reward
Bitcoin block reward refers to the new bitcoins that are awarded by the blockchain network to eligible cryptocurrency miners for each block they mine successfully.
- A block reward refers to the number of bitcoins you get if you successfully mine a block of the currency.
- The amount of the reward halves every 210,000 blocks, or roughly every four years.
- The amount is expected to hit zero around 2140.
Understanding Block Reward
Each bitcoin block is around 1 MB in size and is used to store the bitcoin transaction information. For example, when A sends money to B, this transaction information is stored on a block.
Miners who use mining devices to find new blocks are rewarded for their efforts through block rewards. Other cryptocurrencies have a similar mechanism for rewarding miners with blocks of the respective blockchain. The winning miner claims a block reward by adding it as a first transaction on the block.
At inception, each bitcoin block reward was worth 50 BTC. The block reward is halved after the discovery of every 210,000 blocks, which takes around four years to complete. As of February 2019, one block reward was worth 12.5 BTC.
Working on the principle of a standard cryptocurrency economy with declining bitcoins awarded as block rewards, fewer new bitcoins will be available over time, and that will keep bitcoin prices high. After 64 iterations of halving the block reward, it will eventually become zero.