Mining reward, also known as block reward, is the incentive given to cryptocurrency miners for successfully adding a new block to the blockchain. This reward typically consists of newly created cryptocurrency units and transaction fees. In the case of Bitcoin, the original block reward was 50 BTC, but it undergoes a halving process approximately every four years, reducing the reward by half each time. This halving mechanism is designed to control the rate of new Bitcoin issuance, reflecting a deflationary model where the total supply is capped at 21 million BTC. As of now, the reward stands at 6.25 BTC per block.
The mining reward serves two main purposes: it incentivizes miners to contribute their computational power to the network, ensuring its security and functionality, and it introduces new cryptocurrency units into circulation in a controlled, predictable manner. The reward is claimed by miners by including it as the first transaction in the new block. The process of halving will continue until the last Bitcoin is expected to be mined around the year 2140, at which point the total supply will reach its cap, and miners will solely rely on transaction fees for rewards.