The block reward is what a miner or validator gets paid for producing a valid block. It is the incentive that makes the whole thing work: running a mining rig costs electricity, running a validator costs stake and uptime, and without a reward nobody would bother.
A block reward usually has two components. The subsidy is the new coins the protocol creates out of nothing and gives to whoever produced the block. This is the main mechanism for issuing the coin — every bitcoin that exists was born as part of a subsidy. The fees are transaction fees paid by users for the transactions that the miner included in the block. Fees are not new issuance, they are a redistribution from users to producers.
Bitcoin’s subsidy started at 50 BTC per block in 2009 and halves every 210,000 blocks (roughly every four years). After the April 2024 halving it is 3.125 BTC. It will keep halving until around 2140, at which point the subsidy effectively reaches zero and miners will be paid entirely through fees. This schedule is what enforces Bitcoin’s 21 million cap.
Why It Matters for Security
The block reward is the security budget of the chain. It is the number that determines how much the network pays miners or validators to stay honest. If the reward is too low, mining or validating is unprofitable, participants leave, and the network becomes cheaper to attack. If it is too high, the chain is inflating its own currency to pay for its security — fine in the early years when that is the whole point, but a longer-term problem.
Bitcoin’s long-term bet is that transaction fees will grow large enough to replace the declining subsidy. That has not really happened yet — fees are still a small fraction of the total reward most of the time — and it is one of the open questions about Bitcoin’s economic sustainability over the next few decades. Ethereum took a different path: after the 2022 Merge, new ETH issuance dropped dramatically, and EIP-1559 burns most transaction fees, which means the chain is sometimes deflationary and the security budget is more a function of staking yield than new issuance.
Different chains, different answers, same underlying problem.