How New Bitcoin is Created
Every ten minutes or so, a miner somewhere in the world wins a computational race and adds a new batch of transactions to Bitcoin’s blockchain. As a reward, the network gives that miner a fixed amount of brand-new Bitcoin. This payment is called the block reward.
The block reward is the only way new Bitcoin comes into existence. No company or central bank controls the supply. The network issues new Bitcoin automatically, on a predictable schedule, every time a block is mined. The rules are written into the code and enforced by the network itself.
Inside every block, the very first transaction is special. It creates new coins out of thin air and sends them to the winning miner. This is the moment new Bitcoin is born.
The reward started at 50 BTC per block when Bitcoin launched in 2009. A built-in rule called the halving cuts it in half every 210,000 blocks — roughly every four years. As of the most recent halving in April 2024, the block reward is 3.125 BTC per block. With roughly 144 blocks mined each day, that means about 450 new Bitcoin enter circulation daily.
Why the Block Reward Matters
The block reward serves two purposes at the same time.
It controls Bitcoin’s supply. There will only ever be 21 million Bitcoin. The halving schedule enforces this hard cap by slowing the rate of new coins over time. More than 95% of all Bitcoin has already been mined, with the last fraction created around the year 2140.
It pays for network security. Miners spend real money on electricity and hardware to compete for the block reward, making the network practically impossible to attack. This gives miners a powerful financial reason to play by the rules. To see how this mechanism works, read about proof of work.
One mechanism handles both jobs. The act of creating new coins is the act of securing the network.
What Happens When the Reward Runs Out
As the block reward shrinks with each halving, transaction fees become a larger share of what miners earn. Every Bitcoin transaction includes a small fee paid to the miner who includes it in a block. Today, these fees are a bonus on top of the block reward. Over time, they will become the primary source of miner income.
By the time the block reward reaches zero around 2140, the network’s security will depend entirely on transaction fees. The logic is straightforward. If Bitcoin is widely used by then, transaction volume alone will generate enough fees to keep miners profitable.
This transition is gradual, not a sudden cliff. Each halving gives the network roughly four more years to grow its user base and transaction volume. After each of Bitcoin’s four halvings so far, some predicted the network would weaken. Instead, it grew stronger every time.
What’s Next
The block reward is the heartbeat of Bitcoin’s economic design. To understand the bigger picture, read What is Bitcoin?. To see how it fits into Bitcoin’s origin story, explore The Bitcoin Whitepaper Explained. For more on how the blockchain records every block, read What is the Bitcoin Blockchain?.