Definition
A block reward is compensation for block production under a blockchain’s protocol. In Bitcoin discussions, it commonly combines the block subsidy, which creates new BTC, and transaction fees collected from included transactions. The subsidy and total reward are related but are not interchangeable terms.
How It Works
A miner constructs a candidate block and specifies reward outputs in its coinbase transaction. Other nodes verify that the claimed amount does not exceed what the protocol permits. The block must also satisfy proof-of-work and other validity rules. Other networks compensate validators through different combinations of issuance, fees and consensus duties; Bitcoin’s payment structure should not be assumed universal.
Key Considerations
Bitcoin’s halving reduces the subsidy, not transaction fees, so total block revenue does not necessarily fall by exactly half. Fees vary with transaction demand, while actual profitability also depends on operating costs and asset prices. A discovered block that is not retained in the accepted chain generally does not yield a spendable reward on that chain. Reward availability can also be subject to maturity or withdrawal rules.