LeoGlossary: Block Reward

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LeoFinance
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Blockchain incentives the providers of infrastructure. There are various methods to accomplish this depending upon the consensus mechanism.

Under the Proof-of-Work concept, the rewards is incentive for the miner who successfully calculates the hash. When this is accomplished, the block carries a specific payout in coins.

Bitcoin is known for its halving where the block rewards are reduced by 50%. This happens roughly every 4 years.

Proof-of-Stake (PoS) and Delegated-Proof-of-Stake (DPoS) do not use miners. Nevertheless, block producers are incentivized for proving infrastructure to the network. This means that they are paid out of the currency's inflation.

The evolution of cryptocurrency is seeing this idea carried away from the base layer and onto layer 2. Many are developing sidechains that utilize the same concept of incentivizing infrastructure. This is to ensure there is proper motive to decentralize at that layer also.

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