Betting on Blockchain Consensus with Fantomette.

Blockchain-based consensus protocols present the opportunity to develop new protocols, due to their novel requirements of open participation and explicit incentivization of participants. To address the first requirement, it is necessary to consider the leader election inherent in consensus protocols, which can be difficult to scale to a large and untrusted set of participants. To address the second, it is important to consider ways to provide incentivization without relying on the resource-intensive proofs-of-work used in Bitcoin. In this paper, we propose a new leader election protocol, Caucus. We both prove it secure and demonstrate via a prototype implementation its cost-effectiveness. We next fit this leader election protocol into a broader blockchain-based consensus protocol, Fantomette, that treats incentivization as a first-class concern. Again, we argue for the security of Fantomette despite the fact that it does not rely on expensive processes such as proof-of-work.