How Do Miners Make Money?
Two paychecks, one envelope
Nobody hires miners — the protocol pays for the find. One stream is minted by the protocol itself — the subsidy, new coin conjured strictly on schedule. The other is bid by users — fees, the price of getting a transaction into limited block space. Together they're the block reward. Half the internet treats “reward” and “subsidy” as synonyms; they aren't — the reward is subsidy plus fees. Both land in the same envelope, paid in bitcoin, never dollars.
The subsidy: coin minted by code
Since the April 2024 halving at block 840,000, every block mints 3.125 BTC to its finder. In sats — bitcoin's smallest unit, 100,000,000 to the coin — that's 312,500,000 per block. At the target cadence of 144 blocks a day that's 450 new BTC daily, network-wide. The subsidy halves on a fixed schedule until it reaches zero around 2140 — the countdown and the history live on the halving page.
The coinbase transaction: the block's built-in payout
The first transaction in every block is unlike every other: it has no sender — it's the finder's payout, written on the page itself. It mints the subsidy and sweeps up the block's fees into an address the miner (or its pool) chose before pulling a single drawer. Write yourself a bigger payout and every node rejects the whole block — overpaying yourself is invalid by consensus, not by etiquette. Two fine-print facts: the payout can't be spent until 100 more blocks land (~17 hours), and yes — the exchange named itself after this transaction, not the other way around. The receipts part: it's all public. Open any block and read the split yourself.
Your machine's drawer comes up zero-stamped and the block publishes. What lands in the payout?
Transaction fees: the auction on top
Block space is limited, so users bid for it — and the finder keeps every fee in the block. How big a slice? It swings by era. In recent years fees have mostly been a small, low-single-digit slice of the reward — lately near historic lows. But congestion changes the game fast: late 2017, spring 2021, and the 2023–24 inscription waves — a craze for writing images and text into blocks — all spiked it. The extreme was halving day itself, April 20, 2024, when a token-launch frenzy briefly made fees outpay the subsidy. A dated one-off, not a trend. The tile above reads from our own node's block-by-block capture; it lights up as the archive banks its first full days at the chain tip, and the deep history lives at /btc/fees.
From coin to cash
A miner's bills — electricity, rent, hardware — arrive in dollars; the revenue arrives in coin. So miners sell some of what they mine to keep the lights on. That's mechanics, not strategy.
Who actually collects: pools
A single machine finds whole blocks rarely (next lesson computes exactly how rarely), so most miners point their hardware at a pool — a search party splitting every find. The pool's address sits in the coinbase, so the pool collects the whole prize — and pays each member small, steady amounts in proportion to drawers pulled. Who's winning the blocks is public too — the pools page tracks it. The full pool lesson comes later in the school.
The long game
The subsidy steps down every 210,000 blocks — roughly every four years — until it hits zero around 2140. Fees are the only revenue designed to remain. Whether they grow enough to carry the network's security gets answered in public, block by block, in data anyone can check. We publish the ledger of it, not a forecast about it.
Who is actually paying the miner for that find?
You want to know exactly what one specific block paid its finder. Where do you look?
A halving arrives. What exactly gets cut in half?
FAQ
- How much do Bitcoin miners make per block?
- 3.125 BTC of subsidy — fixed by code since April 2024 — plus that block's fees. The dollar value moves with price; the coin arithmetic doesn't. Every payout is public in the block's coinbase transaction.
- Do miners get the transaction fees?
- Yes, every fee in the block, on top of the subsidy. Typically a small share in recent years — but 2017, 2021 and 2023–24 congestion spiked it, and on halving day 2024 fees briefly beat the subsidy.
- What is the coinbase transaction?
- Every block's first transaction — the built-in payout with no sender. It mints the subsidy, collects the fees, and locks for 100 blocks. The exchange took its name from it, not vice versa.
- Who pays Bitcoin miners?
- Nobody hires them: the protocol mints the subsidy, users bid the fees. Solo miners collect whole blocks rarely; nearly everyone else gets steady pro-rata payouts through a pool.
Concepts done — the next two lessons are shopping math. Good spot for a break.