Block Reward

A financial amount won by a crypto miner during the addition of a block of transactions to a blockchain network is referred to as a block reward. This addition of a new block is often achieved by solving mathematical computations using computer hardware. A lot of computational energy is required while solving these math problems to create a new block. Dedicated hardware along with high electricity investment is required to conduct such processes.

Earlier, the block reward for Bitcoin mining was fixed at 50 Bitcoins per block. This was during the time of the inception of Bitcoin. However, this value gets reduced by half every four years or whenever 2,10,000 blocks are added to the network. This is done to control the supply of Bitcoins and thereby, create a deflationary effect on its price. This also slows down the time in which Bitcoin reaches the hard cap of 21 million maximum supply. According to experts, Bitcoin mining shall prove unprofitable long before Bitcoin reaches its max supply by 2140. The only incentive the Bitcoin miners shall receive will be in the form of transaction fees. Bitcoin mining ventures that are huge in nature are expected to be profitable in the long run.

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