  We propose a novel reputation system to stimulate well-behaviour, and
competition in online markets. Our reputation system is suited for markets
where a publicly-verifiable "proof-of-misbehaviour" can be generated when one
party misbehaves. Such markets include those that provide blockchain services,
such as monitoring services by watchtowers. Watchtowers are entities that watch
the blockchain on behalf of their offline clients to protect the clients'
interests in applications such as payment networks (e.g., the Lightning
network). In practice, there is no trust between clients and watchtowers, and
it is challenging to incentivize watchtowers to well-behave (e.g., to refuse
bribery). To showcase our reputation system, in this work, we create an open
market of watchtowers, where watchtowers are motivated to not only deliver
their promised service but also reduce their service fees in competition with
each other.
