A block reward is a form of compensation provided to validators who participate in the validation of transactions on a blockchain protocol. The primary purpose of block rewards is to incentivize miners to continue adding new blocks to a blockchain by solving complex mathematical problems that encrypt the transactional data.
Unlike traditional centralized financial systems, where banks assume the responsibility of verifying transactions safeguarding customers' funds, cryptocurrency transactions are verified collaboratively by users worldwide. These users are known as validators, miners, or stakers within the blockchain ecosystem. The reward system serves as a mechanism to maintain the security and operational integrity of the network.