A PoR/PoS-Hybrid Blockchain: Proof of Reputation with Nakamoto Fallback

Reputation is a major component of trustworthy systems. In this work, we describe how to leverage reputation to establish a highly scalable and efficient blockchain. In order to avoid potential safety concerns stemming from the subjective and volatile nature of reputation, we propose a proof-of-reputation/proof-of-stake-hybrid (in short, PoR/PoS-hybrid) blockchain design. Although proof-of-stake and proof-of-reputation have been separately studied, to our knowledge, our proposal is the first cryptographically secure design of proof-of-reputation-based (in short PoR-based) blockchains; and it is the first blockchain that fortifies its PoR-based security by optimized Nakamoto-style consensus. This results in a ledger protocol which is provably secure if the reputation system is accurate, and preserves its basic safety properties even if it is not, as long as the majority of the stake in the system remains in honest hands. Our results put emphasis on reputation fairness as a key feature of any reputation-based lottery. We devise a definition of reputation fairness that ensures fair participation while giving chances to newly joining parties to participate and potentially build reputation. We also describe a concrete lottery in the random oracle model which achieves this definition of fairness. Our treatment of reputation-fairness can be of independent interest.