Definition
The block subsidy is the portion of the block reward consisting of newly minted Bitcoin. It is distinct from transaction fees, which are the other component of the total block reward. The subsidy is the mechanism by which new Bitcoin enters circulation.
Starting at 50 BTC per block in 2009, the subsidy halves every 210,000 blocks until it reaches zero (estimated around 2140). At that point, miners will be compensated solely through transaction fees. The decreasing subsidy enforces Bitcoin’s fixed supply cap of 21 million coins.
In Simple Terms
The newly created Bitcoin in each block, currently 3.125 BTC. Halves every four years until supply reaches 21M.
The newly created Bitcoin in each block reward, separate from transaction fees. Currently 3.125 BTC, halving approximately every four years.