What is Mining rewards?

Mining rewards refer to the incentives that cryptocurrency miners earn for successfully mining a new block on the blockchain.

Get to Know with Mining Rewards

A mining reward, also called a block reward, represents the cryptocurrency received for successfully mining a block of the respective currency.

For instance, mining a block and adding it to the blockchain can earn a reward of 6.25 Bitcoin. The reward amount decreases by half approximately every 210,000 blocks for Bitcoin, occurring roughly every four years. 

Eventually, this reward is expected to reach zero by the year 2140.

Illustrating with Bitcoin

Using Bitcoin as an example, each block is 1 MB in size and contains transaction data, such as Ted sending money to Anya.

Winning Miners

Miners utilize devices to discover new blocks that record such transactions and are rewarded with a block reward for their efforts. This reward constitutes the mining reward they receive. Similar mechanisms exist in other cryptocurrencies for rewarding miners with blocks on their respective blockchains. Typically, the winning miner claims the block reward by including it as the first transaction in the block.

Evolution of Bitcoin Rewards

Initially, each Bitcoin block had a value of 50 BTC in mining rewards. This value halved after the first Bitcoin halving event, occurring every 210,000 blocks, continuing to the present day. As of February 2019, one block reward was 12.5 BTC, which has since reduced to 6.25 BTC, with further adjustments expected as more blocks are mined.

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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.