Glossary

Mining Rewards

Easy

Mining rewards are the rewards that crypto miners receive for mining a new block on the blockchain.

What Are Mining Rewards?

A mining reward, otherwise known as a block reward, is the amount of cryptocurrency you get for successfully mining a block of the currency in question. For example, you can be rewarded 6.25 Bitcoin when you successfully mine a block and add it to the blockchain. The amount of the reward actually halves every 210,000 blocks in terms of Bitcoin, and this is estimated to occur once every four years. The amount is expected to hit zero in the year 2140.

To further explain this point, we will be using the most popular and largest cryptocurrency in the world, Bitcoin. Each bitcoin block is 1 MB in size, and it is used to store the bitcoin transaction information.

For example, when Ted sends money to Anya, this transaction is stored on the block. 

Miners that end up using devices in order to find the new blocks that will record this above transaction are rewarded for doing so through the block reward. This is the mining reward they end up getting. Other cryptocurrencies also have a similar mechanism for rewarding miners with blocks of the respective blockchain in question. The winning miner will typically claim a block reward by adding it as a first transaction on the block itself.

At its inception, each Bitcoin block was actually worth 50 BTC in mining rewards. The unit got halved after the first halving of 210,000 blocks, and so on until present day. In February of 2019, one block reward was worth 12.5 BTC, today it is worth 6.25 BTC, and this will change as more blocks are mined.