A block reward is the payment a miner or validator receives for adding a new block to a blockchain. Two components make it up: newly created coins, called the subsidy, and the transaction fees paid by users inside that block.
Following the halving on 20 April 2024, Bitcoin's subsidy stands at 3.125 BTC per block. Around April 2028 it halves again, dropping to 1.5625 BTC.
Why block rewards exist
Two problems get solved at once, and the elegance of solving both with a single mechanism is part of why the design has survived without modification since 2009.
Security funding. Proof of Work needs miners to spend real money on hardware and electricity. Making that spending rational is what the reward does. Remove it and the network has no defenders.
Distribution. New coins have to enter circulation somehow. Rewarding the participants doing the work spreads them without a central issuer deciding who gets what.
Both were tied to the same mechanism in Satoshi Nakamoto's design. Security and issuance are one transaction.
The two parts of a reward
| Component | Where it comes from | Trend over time |
|---|---|---|
| Block subsidy | Newly created coins, issued by the protocol | Falls to zero on a fixed schedule |
| Transaction fees | Paid by users competing for block space | Varies with demand, becomes the whole reward eventually |
Today the subsidy dominates on Bitcoin. Fees are a minority of miner income most of the time. They spike during congestion.
That ratio has to invert. Halvings cut the subsidy while leaving fees untouched, so fees become a progressively larger share of what secures the network.
Bitcoin's halving schedule
Every 210,000 blocks, roughly four years, the subsidy halves. Hardcoded.
| Event | Date | Subsidy after |
|---|---|---|
| Launch | January 2009 | 50 BTC |
| First halving | 28 November 2012 | 25 BTC |
| Second halving | 9 July 2016 | 12.5 BTC |
| Third halving | 11 May 2020 | 6.25 BTC |
| Fourth halving | 20 April 2024 | 3.125 BTC |
| Fifth halving (projected) | April 2028, block 1,050,000 | 1.5625 BTC |
Until around 2140 the schedule runs, at which point the subsidy rounds to zero. By roughly 2032, more than 99% of all bitcoin that will ever exist will already be circulating.
Block rewards under Proof of Stake
Same purpose. Different mechanics.
Validators rather than miners get paid on Proof of Stake networks, from protocol issuance plus fees. Since September 2022, Ethereum has worked this way.
One structural difference matters. Rather than paying its base fee to validators, Ethereum burns it, so a portion of what users pay is destroyed instead of distributed. During heavy activity that token burn can exceed new issuance, shrinking the supply.
Scale is the other difference. Typically far lower than Proof of Work subsidies, Proof of Stake issuance does not have to cover electricity.
What happens when the subsidy ends
Here is the open question in Bitcoin's design, worth understanding honestly.
Miners will earn only transaction fees. Whether that funds enough security to keep a multi-trillion-dollar settlement network honest is genuinely debated among people who have thought about it carefully. Optimists argue a valuable network generates fees high enough to attract sufficient hashpower. Sceptics argue fee revenue is volatile and a security budget dependent on congestion is fragile.
Nothing here is settled, and the transition is gradual rather than sudden. Each halving is one step along it.
What a block reward does not tell you
- Nothing about mining profitability. Against hardware and electricity costs, which vary enormously by operator, is the only way reward value means anything.
- Nothing about price. New supply falls, and demand determines what happens next. Three halvings preceded major advances, which is a pattern rather than a mechanism.
- Nothing about network security in isolation. Hashrate is the security measure. Funding it is the reward's job.
- Nothing about your returns. How the network operates is what reward mechanics describe, not what holding an asset does.
Where mb.io fits
New supply enters the market through block rewards. Accessing that market takes a regulated venue.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- A curated list of assets, so you're not sorting through thousands of tokens to find the ones worth trading
- Buy, sell, and swap in three steps, from sign-up to purchase
- 24/7 customer support, on web and on the iOS and Android apps
Open your account and start trading on mb.io.
Frequently asked questions
What is Bitcoin's current block reward?
3.125 BTC per block in newly issued coins, plus the transaction fees in that block. At the halving on 20 April 2024, the subsidy dropped to this level.
What is the difference between a block reward and a block subsidy?
The subsidy is the newly created coins. Add the transaction fees paid by users in that block and you have the block reward. Interchangeable use of the terms causes confusion as fees grow in importance.
When is the next Bitcoin halving?
Projected for around April 2028, at block 1,050,000. From 3.125 BTC the subsidy will fall to 1.5625 BTC.
What happens when Bitcoin's block reward reaches zero?
Miners will earn transaction fees alone. Around 2140 that point arrives. Whether fee revenue funds sufficient security is one of the genuinely unresolved questions in Bitcoin's design.
Do Proof of Stake networks have block rewards?
Yes, paid to validators from protocol issuance plus fees. Typically issuance runs much lower than under Proof of Work, and Ethereum burns its base fee rather than paying it out.
Why does the block reward halve?
To enforce a fixed supply cap on a predictable schedule. Cutting issuance every 210,000 blocks produces a converging total, 21 million for Bitcoin.
Do halvings cause the price to rise?
Three halvings have been followed by major advances, a pattern across a very small sample. Whether the halving causes it, or merely coincides with broader liquidity cycles, remains unsettled.
Who receives the block reward?
Whichever miner or validator successfully adds the block. Most Bitcoin mining happens through pools, which share rewards among contributors according to the hashpower each provided.
