A block reward (Block reward) is the reward a network participant receives for successfully forming and adding a new block to the blockchain. It is through this mechanism that in most networks with the Proof-of-Work algorithm new coins are created and put into circulation, and miners receive an incentive to direct computing power toward protecting the network.

The reward usually consists of two parts. The first is the issuance part (coinbase), that is, an amount of new coins predetermined by the protocol that appears together with the block. The second is the total fees for all transactions included in that block. As issuance is exhausted, the role of fees in the overall reward gradually grows.

Reduction of the reward and halving

In many networks the size of the issuance part decreases on a fixed schedule. In Bitcoin this happens approximately every 210,000 blocks: the reward is halved — this event is called a halving. Such a mechanism limits the total issuance and makes coin emission predictable. The smaller the issuance part becomes, the greater the importance of transaction fees for mining profitability.