Mining Rewards
Mining rewards are the monetary rewards (in cryptocurrency) that miners receive for verifying transactions on a blockchain network. As an incentive to join and remain in the mining process, miners receive rewards in return for their work. These rewards can come in multiple forms, such as transaction fees and newly minted coins.
Transaction Fees
Whenever someone sends a transaction across the blockchain network, they must pay a fee to incentivize the miner or group of miners to include it in their next block of transactions. This fee is paid by the sender of the transaction and is rewarded to whichever miner finds it first and includes it into their mined block on the chain.
Newly Minted Coins
In addition to receiving transaction fees from users sending tokens/coins across networks, another reward that miners receive is new coins created when blocks are successfully mined. This reward acts as an additional incentive for people to join mining processes because they have a chance at earning more coins than just those included within each individual transaction’s fee amount alone. The number of new coins released with each successful block varies depending upon how much was initially set aside at launch time for this purpose, but usually amounts between 2-5% of all available supply per year depending upon coin specifics and conditions over time.
Overall, these two types of incentives form what we call “mining rewards” – payment given out when blocks are successfully found through mining efforts performed by individuals or groups on any particular blockchain network.
