{"id":10614,"date":"2023-01-07T01:37:57","date_gmt":"2023-01-07T01:37:57","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=10614"},"modified":"2025-09-10T15:22:55","modified_gmt":"2025-09-10T15:22:55","slug":"what-is-the-block-reward","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-block-reward","title":{"rendered":"What is the block reward?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-block-reward\/#why_was_the_block_reward_created\" >Why was the block reward created?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-block-reward\/#how_does_the_block_reward_work\" >How does the block reward work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-the-block-reward\/#how_is_the_block_reward_calculated\" >How is the block reward calculated?<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p class=\"p1\">A very common concept in the cryptocurrency world is the block reward. This<strong>\u00a0concept<\/strong>\u00a0refers to a certain amount of cryptocurrencies that miners get for their work in mining. In this article we will tell you all about the<strong>\u00a0block reward<\/strong>\u00a0and\u00a0<strong>how it works<\/strong>.<\/p>\n<p class=\"p1\">Through the\u00a0<strong>block reward<\/strong>\u00a0it is possible to create each and every one of the cryptocurrencies that make up a\u00a0<strong>blockchain<\/strong>. With this reward, mining becomes an economic system that sustains the network. This is because with each block that is generated, a miner obtains an\u00a0<strong>economic benefit.<\/strong><\/p>\n<p class=\"p1\">The block reward guarantees two\u00a0<strong>essential aspects<\/strong>\u00a0of the network:<\/p>\n<ul>\n<li class=\"p1\"><strong>An economic incentive<\/strong>\u00a0that allows miners to continue mining blocks and securing the network.<\/li>\n<li class=\"p1\"><strong>The introduction of new currencies<\/strong>\u00a0in the economic system.<\/li>\n<\/ul>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"why_was_the_block_reward_created\"><\/span><strong>Why was the block reward created?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p class=\"p1\">Although block reward is understood as a relatively\u00a0<strong>simple<\/strong>\u00a0concept, its creation was challenging both\u00a0<strong>technically<\/strong>\u00a0and computationally. It all comes in the wake of\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-blockchain-and-how-does-it-work\/\">blockchain technology<\/a>. As we already know, blockchain is a globally distributed database where information is<strong>\u00a0stored<\/strong>\u00a0in blocks and each block is\u00a0<strong>linked<\/strong>\u00a0to the previous one.<\/p>\n<p class=\"p1\">This way of organizing data\u00a0<strong>ensures security in the network<\/strong>\u00a0and is achieved through the process of\u00a0<strong>mining<\/strong>. Mining, in a few words, consists of choosing a series of transactions in the network and grouping them into a single\u00a0<strong>block<\/strong>. A\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-hash\/\">hash<\/a>\u00a0is then generated that corresponds to the same block.<\/p>\n<p class=\"p1\">When\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/who-is-satoshi-nakamoto\/\">Satoshi Nakamoto<\/a>\u00a0thought of this system, he believed that one way to streamline the process was for the network to be composed of\u00a0<strong>thousands of computers<\/strong>\u00a0that streamline the transaction process. However, he ran into another conundrum, how to get\u00a0<strong>miners<\/strong>\u00a0to devote their resources to\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-mining-rig\/\">mining<\/a>\u00a0and maintain the network:\u00a0<strong>the incentive problem<\/strong>. The answer was clearly the Block Reward. This would be\u00a0<strong>compensation for each block<\/strong>\u00a0generated on the Bitcoin network.<\/p>\n<p class=\"p1\">However, the block reward was not only created for this purpose. Satoshi Nakamoto encountered another\u00a0<strong>unknown<\/strong>\u00a0during the creation of Bitcoin, the\u00a0<strong>issuance<\/strong>\u00a0of the coins. The idea behind the creation of Bitcoin was always a decentralized system and to this end no one could control any aspect of Bitcoin, including its issuance. This became one of the most important unknowns as an economic system could not be sustained without\u00a0<strong>a controlled issuance of the currency<\/strong>.<\/p>\n<p class=\"p1\">After a long search for solutions Satoshi understood that the\u00a0<strong>answer<\/strong>\u00a0lay in the block\u00a0<strong>reward<\/strong>\u00a0itself. The system would start by rewarding miners with 50 BTC per block mined, however, this reward would decrease by\u00a0<strong>50%<\/strong>\u00a0every 210,000 blocks mined in the network. This process was given the name\u00a0<strong>Halving<\/strong>.\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/halving-crypto-what-it-is\/\">If you want to learn more about it, Bitnovo offers a more detailed article<\/a>.<\/p>\n<p class=\"p1\">Doing the math, one block is generated approximately every\u00a0<strong>10 minutes<\/strong>, which means that 210,000 blocks will be generated every\u00a0<strong>4 years<\/strong>. The process will be repeated over and over again until the total issuance is approximately\u00a0<strong>21 million BTC<\/strong>.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_1244266595\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu%C3%A9-es-recompensa-de-Bloque1.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque1-300x205.jpg 300w\" alt=\"Qu\u00e9-es-recompensa-de-Bloque\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque1-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque1.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>&nbsp;<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"how_does_the_block_reward_work\"><\/span><strong>How does the block reward work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p class=\"p1\">The operation of the block reward is a very\u00a0<strong>simple<\/strong>\u00a0concept if explained step by step:<\/p>\n<p>First, cryptocurrency users i<strong>ssue one or more transactions<\/strong>\u00a0to the network. These transactions are\u00a0<strong>stored<\/strong>\u00a0until the validation process begins, where each of these transactions will count with\u00a0<strong>a small amount of commission<\/strong>.<\/p>\n<p class=\"p1\">This commission is a\u00a0<strong>micropayment<\/strong>\u00a0through which the miners are incentivized to give priority to the transaction in order to be verified as soon as possible. Once all the transactions are in, the mining or block generation process begins, where each miner selects a set of transactions waiting to be validated.<\/p>\n<p class=\"p1\">The intensity of the mining process is more or less intense depending on the hash function used in the cryptocurrency being worked on. Through this process, what we call Hash will be obtained. This\u00a0<strong>Hash<\/strong>\u00a0will uniquely and individually identify each mined block.<\/p>\n<p class=\"p1\">With the specific Hash found, the miner generates a\u00a0<strong>coinbase transaction<\/strong>\u00a0where a payment is generated and directed to a\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-bitcoin-wallet-is\/\">wallet<\/a>\u00a0controlled by the same miner. The coinbase transaction contains the coins issued for the active block reward. In addition, miners also receive mining fees from each transaction\u00a0<strong>included in the block<\/strong>.<\/p>\n<p class=\"p1\">Finally the resolved\u00a0<strong>block is issued to the network<\/strong>\u00a0so that the nodes can verify the validity of the block. When the nodes reach a\u00a0<strong>consensus<\/strong>\u00a0on the\u00a0<strong>validity<\/strong>\u00a0of the block, it is added to the<strong>\u00a0network<\/strong>\u00a0and the whole process begins again. This controls the issuance of coins and miners receive a reward for each block mined.<\/p>\n<p>If you want to learn more about this Bitcoin consensus mechanism in detail, see our article on\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-proof-of-work-the-bitcoin-consensus-protocol\/\">What is Proof of Work (PoW)?<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_1331872421\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu%C3%A9-es-recompensa-de-Bloque.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque-300x205.jpg 300w\" alt=\"Qu\u00e9-es-recompensa-de-Bloque\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Qu\u00e9-es-recompensa-de-Bloque.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2 class=\"p1\"><span class=\"ez-toc-section\" id=\"how_is_the_block_reward_calculated\"><\/span><b>How is the block reward calculated?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p class=\"p1\">Several\u00a0<strong>factors<\/strong>\u00a0are involved in the calculation of the block reward, such as total cryptocurrency issuance, cryptocurrency generation time, Halving usage, and so on. Below we will look at the most important ones:<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p class=\"p3\"><strong><span class=\"s1\">Halving<\/span><\/strong><\/p>\n<p class=\"p1\">Halving, as we already know, was devised to\u00a0<strong>avoid inflation<\/strong>\u00a0in a cryptocurrency with limited issuance through\u00a0<strong>decreasing rewards<\/strong>\u00a0every certain amount of blocks mined in the network. Halving will halve the\u00a0<strong>reward<\/strong>\u00a0over and over again until\u00a0<strong>total cryptocurrency issuance is reached<\/strong>.<\/p>\n<p class=\"p1\">When a halving occurs, the initial value of the reward and the next scheduled decreases are indicated. When the reward decreases, coins are added to the network at a slower rate leading to the revaluation of the coin.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p class=\"p3\"><strong><span class=\"s1\">Total issuance of cryptocurrencies<\/span><\/strong><\/p>\n<p class=\"p1\"><strong>To calculate<\/strong>\u00a0the block reward a key factor is to know the total issue of the cryptocurrency.\u00a0<strong>The total number<\/strong>\u00a0is of utmost importance since in order to calculate block reward splits it is necessary to know the total number of coins and how often their reward will be\u00a0<strong>split<\/strong>.<\/p>\n<p class=\"p1\">This division has more than one objective since it also seeks the\u00a0<strong>decentralization<\/strong>\u00a0of the cryptocurrency. This is because with a constant division of rewards it manages to spread the coins in different hands.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p class=\"p3\"><strong><span class=\"s1\">Cryptocurrency generation time<\/span><\/strong><\/p>\n<p class=\"p1\">Setting the cryptocurrency\u00a0<strong>generation time<\/strong>\u00a0is a very\u00a0<strong>important<\/strong>\u00a0parameter. To calculate the block reward of a cryptocurrency we need to know the total number of coins to be mined and the\u00a0<strong>time<\/strong>\u00a0each block is mined in order to calculate how often\u00a0<strong>the reward will be divided<\/strong>.<\/p>\n<p class=\"p1\">To understand this better, we can use the case of Bitcoin as an example. We have\u00a0<strong>21 million<\/strong>\u00a0coins of which a block is issued every\u00a0<strong>10 minutes<\/strong>. With this data we can calculate how often approximately every 10 minutes a\u00a0<strong>Halving<\/strong>\u00a0will occur and the block reward will decrease.<\/p>\n<p class=\"p1\">It should be noted that there are other cases where the currency is\u00a0<strong>unlimited<\/strong>\u00a0as in\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ethereum-eth-and-how-does-it-work\/\">Ethereum<\/a>. However, they usually have a\u00a0<strong>temporarily controlled<\/strong>\u00a0issuance to avoid devaluation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>A very common concept in the cryptocurrency world is the block reward. This\u00a0concept\u00a0refers to a certain amount of cryptocurrencies that miners get for their work in mining. In this article we will tell you all about the\u00a0block reward\u00a0and\u00a0how it works. Through the\u00a0block reward\u00a0it is possible to create each and every one of the cryptocurrencies that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7780,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[165],"tags":[],"class_list":["post-10614","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrencies"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=10614"}],"version-history":[{"count":2,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10614\/revisions"}],"predecessor-version":[{"id":24631,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10614\/revisions\/24631"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/7780"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=10614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=10614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=10614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}