Professor Kiayias explores consensus evolution at Science of Blockchain Conference 2025

The 2025 Science of Blockchain Conference (SBC) brought together leading researchers, engineers, and academics at UC Berkeley to explore the theoretical foundations that underpin today’s blockchain systems. Input | Output (IO) had strong representation at this event, showcasing the organization’s continued commitment to bridging rigorous research with practical implementation.

Professor Aggelos Kiayias – IO’s Chief Scientist and Chair in Cyber Security and Privacy at the University of Edinburgh – delivered the keynote ‘The Evolving Art of Agreement,’ examining how consensus protocols have developed in the blockchain era.

Professor Kiayias’ presentation offered both a historical perspective on consensus mechanisms and an analysis of the challenges that lie ahead for the blockchain community.

The blockchain innovation

Professor Kiayias began by addressing a fundamental question: what flavor of consensus does blockchain actually solve? The answer lies in state machine replication (SMR), specifically what he termed ‘ledger consensus’.

Blockchain’s approach to consensus differs from other methods of attaining agreement where participants are known (local or national polls, for example). Blockchain protocols operate in an environment where:

• parties are unauthenticated
• the number of participants fluctuates dynamically
• resource possession, rather than set permissions, determines access

A bottom-up revolution

Blockchain reimagines SMR as a service that bootstraps itself from the ground up. Interested parties invest resources to contribute to the ledger, minting coins according to the system’s monetary policy. They then sell these coins to users who want to access the ledger directly, creating a self-sustaining economy around SMR.

This bottom-up approach has proven successful through systems like Bitcoin – operating continuously for over 15 years – Ethereum, Cardano, and others.

Taking a gambit to resolve the energy riddle

Professor Kiayias also addressed one of blockchain’s key concerns: energy expenditure. Bitcoin’s proof-of-work mechanism is energy-hungry, prompting the question, ‘can we achieve the same security guarantees without this cost?’

The answer led to what he called the ‘proof of stake gambit’ — using virtual resources (ie, stake) rather than computational power. This approach sacrifices some setup transparency by requiring a public key directory, but offers significant benefits, including energy efficiency and easier integration of Byzantine Fault Tolerance (BFT) techniques.

The Ouroboros achievement

The energy consumption question motivated the development of the Ouroboros protocol family — a general-purpose proof-of-stake distributed ledger that powers Cardano. Ouroboros demonstrates how to retain many of Bitcoin’s characteristics while minimizing energy expenditure.

The protocol family includes several versions, each addressing specific challenges:

• Ouroboros Praos, an event-driven protocol with bounded delays
• Ouroboros Genesis for dynamic availability and universal composability
• Ouroboros Crypsinous for maintainers’ privacy
• Ouroboros Chronos for clock synchronization within the protocol

The Ouroboros family of protocols not only matches Bitcoin’s consensus capabilities but exceeds with faster settlement and higher throughput.

From cryptographic to economic security

One of the presentation’s insights reflected on the evolution from cryptographic to economic security. While traditional cryptographic arguments rely on threshold assumptions that can be difficult to validate in practice, economic security arguments can potentially reduce these assumptions by interpreting attacks in terms of their economic cost.

This transition brings new challenges. The moment people begin discussing the economics of running a protocol, participants may change their strategies, leading to Nash dynamics where parties continuously optimize their approaches.

The decentralization challenge

Professor Kiayias highlighted a key concern: uncontrolled pooling. Due to economies of scale and reward variance, participants tend to pool resources, potentially undermining the protocol’s security assumptions and compromising decentralization.

To address this, research has led to innovative reward-sharing schemes that facilitate pooling on-chain while promoting decentralization. Cardano’s founding entities successfully deployed this approach, resulting in a decentralized stake pool operator (SPO) distribution — demonstrating that theoretical models can work with real participants and real rewards.

The road ahead

Looking forward, Professor Kiayias outlined several key challenges for the blockchain community:

• Economic security and decentralization: we need better understanding and measurement of both concepts to explain all non-falsifiable assumptions in economic terms.
• Sustainability and monetary policy: how can blockchain economies absorb exogenous shocks? This may require on-chain ‘central bank’ functionality.
• Governance: sound decision-making and e-voting capabilities are essential, pointing toward an era of digital constitutionalism.
• Cryptographic agility: systems must be able to update themselves safely while running — fixing the car while driving it, as Professor Kiayias put it.

The foundation of scientific progress

Professor Kiayias concluded with a message for the blockchain community: the ability to formulate and articulate succinct problem statements is a cornerstone of scientific advancement. This enables us to understand each other’s efforts, build upon them, and work together at the scale needed for these systems to succeed.

At IOG, this philosophy drives our continued investment in research infrastructure. We believe that rigorous academic investigation, formal methods, and peer-reviewed science are essential foundations for building the decentralized, inclusive, and fair systems of the future.

As Professor Kiayias reminded the conference, understanding the fundamental problems of blockchain systems is what enables us to ultimately renegotiate information technology on more democratic terms for everyone.

Academic papers from IO research are freely available from the IOG library.