Block subsidy refers to the rewards given to miners for creating a new block on a blockchain. This reward typically consists of two components: new coins created with each block and transaction fees from the transactions included in that block. Initially, miners receive a predetermined number of coins as a reward for their efforts.

This amount usually decreases over time through a mechanism known as halving, which occurs at regular intervals. For example, in Bitcoin, the block subsidy started at 50 bitcoins in 2009, halved to 25 in 2012, and continues to decrease approximately every four years.

The block subsidy plays a crucial role in incentivizing miners to secure the network and validate transactions. It ensures a steady supply of new coins, maintaining the currency’s economic model. As the block subsidy decreases, transaction fees are expected to become a more significant source of revenue for miners, making the sustainability of the network dependent on both mining rewards and user activity.