Block Reward
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A block reward is the payment a miner receives for successfully mining a new block and adding it to the blockchain. It is the primary incentive that drives miners to secure the network.
What makes up a block reward?
A block reward has two components:
- Subsidy — newly created coins minted with each block. This is how new cryptocurrency enters circulation.
- Transaction fees — fees paid by users whose transactions are included in the block.
In Bitcoin's early days, the subsidy dominated. As the subsidy decreases over time through halving events, transaction fees are expected to make up a larger share of miner revenue.
Halving
Many Proof of Work blockchains use a halving mechanism — a scheduled reduction of the block subsidy by 50% after a fixed number of blocks:
- Bitcoin (BTC) — halving every 210,000 blocks (~4 years). The subsidy started at 50 BTC and is currently 3.125 BTC (as of 2024).
- Litecoin (LTC) — halving every 840,000 blocks.
- Bitcoin Cash (BCH) — same schedule as Bitcoin.
Halvings reduce the rate of new coin issuance and historically have preceded significant price increases.
Block rewards by network
| Network | Current subsidy | Halving |
|---|---|---|
| Bitcoin (BTC) | 3.125 BTC | Every ~4 years |
| Litecoin (LTC) | 6.25 LTC | Every ~4 years |
| Kaspa (KAS) | ~115 KAS (declining) | Monthly reduction |
| Monero (XMR) | ~0.6 XMR + fees | Smooth tail emission |
| Alephium (ALPH) | ~1 ALPH per block | Gradual reduction |
Block reward and pool mining
When mining in a pool, the block reward is split among all participating miners proportionally to their contributed hashrate. Kryptex Pool uses the PPS+ (Pay Per Share Plus) model, which pays miners for each submitted share regardless of whether the pool finds a block.
