The reward for each block was created. This is an incentive reserved for solving the mathematical problem linked to the league. Different kinds of cryptocurrencies give out block rewards with different values. For example, the premium for mining a Bitcoin block is 12.5 bitcoins per block mined, halting every 210,000 blocks.
Bitcoin's Block Rewards Vs. Ethereum's
Ethereum, bitcoin's main competitor as a cryptocurrency, also relies on block rewards to provide incentives to miners. With Ethereum, the prize is a digital token called "ether," which is rewarded each time a miner succeeds in giving the mathematical proof of a new block. As with bitcoin, miners are also awarded a transaction fee, known as a "gas" fee.
Unlike bitcoin, there is no limit on the number of Ethereum ether tokens that can be created, and they are made at a much faster pace—in seconds versus about 10 minutes. So the total number of blocks in the Ethereum chain is more significant than in the bitcoin chain.
The Future of Bitcoin Block Rewards
To limit inflation, bitcoin creator Satoshi Nakamoto designed bitcoin to have only 21 million bitcoins ultimately. This is why the size of bitcoin block rewards is halved after creating every 210,000 blocks, which takes around four years. At bitcoin's inception in 2009, each block reward was worth 50 BTC. In May 2020, the block reward was halved a third time to 6.25 BTC. And as of May 2021, there were already 18.7 million bitcoins in existence or nearly 90% of the total planned supply.
Ultimately, the block reward is scheduled to reach zero around May 2140, but mining will likely no longer be profitable long before that date is reached. As of April 2039, about 99.6% of bitcoins will already have been issued, and the block reward will be just 0.19531250 bitcoin.1 Along the way, transaction fees are expected to become the primary incentive for bitcoin miners.
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