Block reward distribution refers to the process by which newly created coins and transaction fees are allocated to miners or validators who contribute to the blockchain network. When a miner successfully adds a new block of transactions to the blockchain, they receive this reward as compensation for their efforts and resources used, such as computational power and electricity.

The total block reward can consist of two main components: the fixed number of coins generated with each block and the transaction fees from the transactions included in that block. This encourages miners to secure the network and validate transactions. The distribution can vary based on the consensus mechanism being used.

In proof-of-work systems, rewards are typically earned by the first miner to solve a complex mathematical problem, while in proof-of-stake systems, validators are chosen to create new blocks based on the amount of coins they hold and are willing to “stake.” Over time, as the total supply of the cryptocurrency approaches its capped limit, block rewards usually decrease, a process often guided by predetermined schedules, like Bitcoin’s halving events. This can affect the incentives for participants in the network.