Block Reward
A block reward is a reward given to a miner or group of miners for successfully mining a block of transactions on a blockchain network. The reward is usually a combination of newly created cryptocurrency tokens and transaction fees paid by users of the blockchain network. The block reward is an incentive for miners to secure the network and process transactions. The reward is also an incentive for miners to continue to mine on the network, as the reward is reduced over time.
History of Block Rewards
The concept of block rewards was first introduced in 2009 with the launch of Bitcoin. The Bitcoin protocol stipulates that miners will receive a reward of newly created Bitcoin tokens for successfully mining a block of transactions. This reward is halved every 210,000 blocks, or roughly every four years. As of May 2021, the block reward for Bitcoin is 6.25 BTC.
Since the launch of Bitcoin, many other blockchain networks have adopted the concept of block rewards. Ethereum, for example, rewards miners with a combination of newly created Ether tokens and transaction fees paid by users of the network. The reward is also halved every few years, and as of May 2021, the block reward for Ethereum is 2 ETH.
Comparison of Block Rewards
| Blockchain Network | Block Reward (May 2021) |
|---|---|
| Bitcoin | 6.25 BTC |
| Ethereum | 2 ETH |
| Litecoin | 12.5 LTC |
| Monero | 2.6 XMR |
Summary
A block reward is a reward given to a miner or group of miners for successfully mining a block of transactions on a blockchain network. The reward is usually a combination of newly created cryptocurrency tokens and transaction fees paid by users of the blockchain network. The block reward is an incentive for miners to secure the network and process transactions. The concept of block rewards was first introduced in 2009 with the launch of Bitcoin, and since then, many other blockchain networks have adopted the concept. For more information about block rewards, you can visit websites such as CoinMarketCap, Investopedia, and Blockonomi.
See Also
- Mining
- Proof of Work
- Proof of Stake
- Cryptocurrency
- Blockchain
- Transaction Fees
- Halving
- Hash Rate
- Difficulty
- Consensus Mechanism
