A block reward is the incentive given to a miner for validating and adding a new block of transactions to a blockchain. This reward typically consists of two parts: newly created coins and transaction fees from the transactions included in that block.

When a miner successfully solves complex mathematical problems, they are allowed to add the next block in the chain. In return, they receive a certain number of coins generated by the protocol.

For example, in the case of Bitcoin, this reward started at 50 BTC for each block but is halved roughly every four years during an event called “halving.” The block reward system serves multiple purposes. It encourages miners to participate in the network, ensuring that transactions are processed and secured.

Additionally, it helps regulate the supply of the cryptocurrency, as the total number of coins that can ever be produced is capped, creating a scarcity effect over time. Overall, block rewards play a crucial role in maintaining the integrity and functionality of a blockchain network.