Block rewards are economic incentives given to miners when they succeed in mining new blocks in the blockchain. In cryptosystems such as Bitcoin and Ethereum, miners verify transactions and add them to new blocks in the blockchain.
In return, they are given a number of new coins or tokens as a reward for their contribution in ensuring the security and integrity of the network.
When Bitcoin was launched in 2009, initially, block rewards were the only method of creating new Bitcoins. When miners succeed in mining a new block, they are given a new amount of Bitcoin as a block reward. However, as part of Bitcoin’s economic design, block rewards are periodically reduced through a mechanism known as “halving”.
Block rewards serve as incentives to improve network security. All miners must use computing power and other resources to mine blocks, so block rewards are a motivation for them to continue to contribute to maintaining network security and guaranteeing the reliability of transactions in it.
In many blockchain protocols, including Bitcoin, there is also a transaction fee that is paid by users to prioritize their transactions within blocks, and this fee is also part of the economic incentive for miners.