Block Reward
The cryptocurrency awarded to a miner or validator for successfully creating a new block on the blockchain. Block rewards consist of newly minted coins (block subsidy) plus the transaction fees from all transactions included in the block. In Bitcoin, the block subsidy halves approximately every four years.
“Bitcoin's block reward started at 50 BTC in 2009, halved to 25 in 2012, to 12.5 in 2016, to 6.25 in 2020, and to 3.125 BTC in 2024.”
Mining
The process of using computational power to validate transactions and add new blocks to a Proof of Work blockchain. Miners compete to solve a cryptographic puzzle (finding a hash below a target difficulty), and the first to succeed earns the block reward plus transaction fees. Mining secures the network by making it prohibitively expensive to attack.
Halving
A pre-programmed event that cuts the block reward for mining new blocks in half, reducing the rate at which new coins are created. Bitcoin's halving occurs every 210,000 blocks (approximately every 4 years) and is a core mechanism for enforcing its deflationary supply schedule. Halvings are historically correlated with subsequent bull markets due to reduced sell pressure from miners.
Transaction Fee
A payment made to network validators or miners for processing and confirming a transaction on the blockchain. Fees incentivize block producers and prevent network spam. Fee structures vary by blockchain — Bitcoin uses a fee market based on transaction size in bytes, while Ethereum uses gas-based pricing. During congestion, fees increase as users bid for limited block space.
Validator
A network participant in a Proof of Stake blockchain that is responsible for proposing new blocks, attesting to the validity of blocks proposed by others, and maintaining the integrity of the network. Validators must stake a minimum amount of the native token as collateral and run node software continuously. They earn rewards for honest participation and face slashing penalties for misbehavior.