Block Subsidy

A block subsidy is the fixed number of new bitcoins created with every block added to the Bitcoin blockchain. This mechanism controls how new bitcoins enter circulation. The initial subsidy began at 50 BTC per block, but this amount is programmed to halve every 210,000 blocks, or about every four years—a process known as the "halving."

The block subsidy is claimed by miners through the coinbase transaction, which is the first transaction in a block and uniquely doesn’t draw from any previous transaction. Miners must wait 100 blocks before spending these newly minted coins due to a built-in lockup period.

Alongside transaction fees collected from users including their payments in each block, the block subsidy forms the total miner reward for adding a valid block to the chain. Since the subsidy decreases over time, transaction fees become an increasingly important part of miners' incentives as Bitcoin's supply nears its limit.