As the Bitcoin blockchain has a fixed block size of 1MB, it can only accommodate an average of seven transactions per second, so unconfirmed transactions sit in something called a Mempool, waiting for Miners to take over.
Miners’ function is to watch the Mempool, waiting for these unconfirmed transactions, then package them into a candidate block; every ten minutes, one of the candidate blocks is chosen to be added to the existing blockchain confirming (settling) all the transactions within it.
Miners are paid for this settlement function with new bitcoin for every confirmed block. The first block – aka Genesis block – was mined on January, 3rd 2009, with a reward of 50BTC.
Ever since, a new block has been added to the network at approximately 10 minute intervals, and every 210,000 blocks the reward miners receive halves. This roughly equates to a four year halving cycle and means the supply cap of 21 million bitcoin will be reached around 2140.
At Bitcoin’s 2021 ATH price of $64,805 the reward rate of 6.25BTC amounts to over $420k paid per block, every ten minutes.
The BTC that is awarded to the miner who confirms each new block is also known as the “coinbase reward” – a term which was later claimed by the cryptocurrency exchange of the same name.
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