Block rewards are the cryptocurrency incentives given to miners or validators for successfully adding a new block of transactions to a blockchain. These rewards typically consist of newly minted coins and accumulated transaction fees from the block. They serve as a primary economic mechanism to incentivize network participants to secure the ledger and process transactions. The design of block rewards is central to a cryptocurrency’s monetary policy.
Context
News about block rewards often focuses on events like Bitcoin’s halving, which periodically reduces the new coin issuance portion of the reward, impacting miner profitability and network security economics. Changes in block rewards directly influence the supply dynamics of a digital asset and the economic viability of mining operations. These adjustments frequently lead to market speculation and shifts in mining power distribution.
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