Chaya Ganesh, Claudio Orlandi, and Daniel Tschudi

(Submitted in 2019)

Popular decentralized cryptocurrencies like Bitcoin [Nak08] crucially rely on the existence of a distributed ledger, known as the Blockchain.

The original protocols used to build and maintain the Blockchain were based on proof-of-work consensus protocols (PoW). While blockchain protocols mark a significant breakthrough in distributed consensus, reliance on expensive PoW components result in enormous waste of energy [OM14, CDE+16], therefore it is an important open problem to find alternative consensus mechanisms which are less wasteful than PoW but at the same time maintain the positive features offered by PoW. Proof-of-stake consensus protocols (PoS) are one of the most promising technology to replace PoW and still preserve similar robustness properties: while PoW provides robustness assuming that a (qualified) majority of the computing power is honest, PoS instead relies on the assumption that a majority of the wealth in the system is controlled by honest participants.

The rationale behind PoS is that users who have significant stakes in the system have an economic incentive in keeping the system running according to the protocol specification, as they risk that their stakes will become worthless if trust in the cryptocurrency vanishes.

As is usual in this research space, the initial idea of proof-of-stake appeared informally in an online Bitcoin forum [bit11], and since then, there have been a series of candidates for such protocols [KN12, BLMR14, BGM16].

Recently, there have been works on formal models for proof-of- stake and protocols with provable security guarantees [BPS16, KRDO17, GHM+17, DGKR18, BGK+18].

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