What Drives Miners to Secure a Blockchain

A block reward is the payment a blockchain network gives to the miner who adds the next verified block of transactions to the chain. This payment combines new coins created by the protocol itself and the transaction fees everyone in that block agreed to pay. For proof-of-work networks like Bitcoin and Litecoin, the block reward is the entire reason anyone bothers to point expensive computing hardware at the problem at all.

Miners compete to assemble the next batch of transactions and get it accepted onto the chain. To win this competition, a miner must solve a difficult math puzzle, which takes real computing hardware and real electricity to crack. Whoever solves it first gets to add their block, and the network pays them for the effort.

The rules behind the block reward live in the protocol's code, not in a company boardroom or a government office. Bitcoin's code cuts the reward in half every 210,000 blocks, an event known as a halving. Litecoin follows a similar rule every 840,000 blocks, but some networks skip halving entirely.