diff --git a/cli/teos_cli.py b/cli/teos_cli.py
index 5c8b56b..aee10c3 100644
--- a/cli/teos_cli.py
+++ b/cli/teos_cli.py
@@ -113,19 +113,20 @@ def add_appointment(appointment_data, user_sk, teos_id, teos_url):
     add_appointment_endpoint = "{}/add_appointment".format(teos_url)
     response = process_post_response(post_request(data, add_appointment_endpoint))
 
-    signature = response.get("signature")
+    tower_signature = response.get("signature")
     # Check that the server signed the appointment as it should.
-    if not signature:
+    if not tower_signature:
         raise TowerResponseError("The response does not contain the signature of the appointment")
 
-    rpk = Cryptographer.recover_pk(appointment.serialize(), signature)
+    rpk = Cryptographer.recover_pk(appointment.serialize(), tower_signature)
     if teos_id != Cryptographer.get_compressed_pk(rpk):
         raise TowerResponseError("The returned appointment's signature is invalid")
 
     logger.info("Appointment accepted and signed by the Eye of Satoshi")
     logger.info("Remaining slots: {}".format(response.get("available_slots")))
+    logger.info("Start block: {}".format(response.get("start_block")))
 
-    return appointment, signature
+    return appointment, tower_signature
 
 
 def get_appointment(locator, user_sk, teos_id, teos_url):
diff --git a/common/errors.py b/common/errors.py
index 786a9d7..c115a31 100644
--- a/common/errors.py
+++ b/common/errors.py
@@ -7,6 +7,7 @@ APPOINTMENT_FIELD_TOO_SMALL = -5
 APPOINTMENT_FIELD_TOO_BIG = -6
 APPOINTMENT_WRONG_FIELD = -7
 APPOINTMENT_INVALID_SIGNATURE_OR_INSUFFICIENT_SLOTS = -8
+APPOINTMENT_ALREADY_TRIGGERED = -9
 
 # Registration errors [-33, -64]
 REGISTRATION_MISSING_FIELD = -33
diff --git a/requirements.txt b/requirements.txt
index 5ea83ae..20406f5 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -4,4 +4,5 @@ cryptography==2.8
 coincurve
 pyzbase32
 requests
-plyvel
\ No newline at end of file
+plyvel
+readerwriterlock
\ No newline at end of file
diff --git a/teos/__init__.py b/teos/__init__.py
index 1a29ddb..b65b7e7 100644
--- a/teos/__init__.py
+++ b/teos/__init__.py
@@ -21,6 +21,7 @@ DEFAULT_CONF = {
     "DEFAULT_SUBSCRIPTION_DURATION": {"value": 4320, "type": int},
     "EXPIRY_DELTA": {"value": 6, "type": int},
     "MIN_TO_SELF_DELAY": {"value": 20, "type": int},
+    "LOCATOR_CACHE_SIZE": {"value": 6, "type": int},
     "LOG_FILE": {"value": "teos.log", "type": str, "path": True},
     "TEOS_SECRET_KEY": {"value": "teos_sk.der", "type": str, "path": True},
     "APPOINTMENTS_DB_PATH": {"value": "appointments", "type": str, "path": True},
diff --git a/teos/api.py b/teos/api.py
index 0bcbddb..b1c90ec 100644
--- a/teos/api.py
+++ b/teos/api.py
@@ -5,7 +5,7 @@ from flask import Flask, request, abort, jsonify
 from teos import LOG_PREFIX
 import common.errors as errors
 from teos.inspector import InspectionFailed
-from teos.watcher import AppointmentLimitReached
+from teos.watcher import AppointmentLimitReached, AppointmentAlreadyTriggered
 from teos.gatekeeper import NotEnoughSlots, AuthenticationFailure
 
 from common.logger import Logger
@@ -192,6 +192,13 @@ class API:
             rcode = HTTP_SERVICE_UNAVAILABLE
             response = {"error": "appointment rejected"}
 
+        except AppointmentAlreadyTriggered:
+            rcode = HTTP_BAD_REQUEST
+            response = {
+                "error": "appointment rejected. The provided appointment has already been triggered",
+                "error_code": errors.APPOINTMENT_ALREADY_TRIGGERED,
+            }
+
         logger.info("Sending response and disconnecting", from_addr="{}".format(remote_addr), response=response)
         return jsonify(response), rcode
 
diff --git a/teos/block_processor.py b/teos/block_processor.py
index 136e9f7..73b8370 100644
--- a/teos/block_processor.py
+++ b/teos/block_processor.py
@@ -1,4 +1,5 @@
 from common.logger import Logger
+from common.exceptions import BasicException
 
 from teos import LOG_PREFIX
 from teos.tools import bitcoin_cli
@@ -7,6 +8,10 @@ from teos.utils.auth_proxy import JSONRPCException
 logger = Logger(actor="BlockProcessor", log_name_prefix=LOG_PREFIX)
 
 
+class InvalidTransactionFormat(BasicException):
+    """Raised when a transaction is not properly formatted"""
+
+
 class BlockProcessor:
     """
     The :class:`BlockProcessor` contains methods related to the blockchain. Most of its methods require communication
@@ -89,17 +94,19 @@ class BlockProcessor:
             raw_tx (:obj:`str`): the hex representation of the transaction.
 
         Returns:
-            :obj:`dict` or :obj:`None`: The decoding of the given ``raw_tx`` if the transaction is well formatted.
+            :obj:`dict`: The decoding of the given ``raw_tx`` if the transaction is well formatted.
 
-            Returns ``None`` otherwise.
+        Raises:
+            :obj:`InvalidTransactionFormat`: If the provided ``raw_tx`` has invalid format.
         """
 
         try:
             tx = bitcoin_cli(self.btc_connect_params).decoderawtransaction(raw_tx)
 
         except JSONRPCException as e:
-            tx = None
-            logger.error("Cannot build transaction from decoded data", error=e.error)
+            msg = "Cannot build transaction from decoded data"
+            logger.error(msg, error=e.error)
+            raise InvalidTransactionFormat(msg)
 
         return tx
 
diff --git a/teos/teosd.py b/teos/teosd.py
index 8e1a694..f1fa1df 100644
--- a/teos/teosd.py
+++ b/teos/teosd.py
@@ -84,7 +84,13 @@ def main(command_line_conf):
             db_manager = AppointmentsDBM(config.get("APPOINTMENTS_DB_PATH"))
             responder = Responder(db_manager, gatekeeper, carrier, block_processor)
             watcher = Watcher(
-                db_manager, gatekeeper, block_processor, responder, secret_key_der, config.get("MAX_APPOINTMENTS")
+                db_manager,
+                gatekeeper,
+                block_processor,
+                responder,
+                secret_key_der,
+                config.get("MAX_APPOINTMENTS"),
+                config.get("LOCATOR_CACHE_SIZE"),
             )
 
             # Create the chain monitor and start monitoring the chain
diff --git a/teos/watcher.py b/teos/watcher.py
index ff5ff40..644bc79 100644
--- a/teos/watcher.py
+++ b/teos/watcher.py
@@ -1,5 +1,7 @@
 from queue import Queue
 from threading import Thread
+from collections import OrderedDict
+from readerwriterlock import rwlock
 
 from common.logger import Logger
 from common.tools import compute_locator
@@ -11,6 +13,7 @@ from common.exceptions import InvalidParameter, SignatureError
 from teos import LOG_PREFIX
 from teos.cleaner import Cleaner
 from teos.extended_appointment import ExtendedAppointment
+from teos.block_processor import InvalidTransactionFormat
 
 logger = Logger(actor="Watcher", log_name_prefix=LOG_PREFIX)
 
@@ -19,6 +22,140 @@ class AppointmentLimitReached(BasicException):
     """Raised when the tower maximum appointment count has been reached"""
 
 
+class AppointmentAlreadyTriggered(BasicException):
+    """Raised when an appointment is sent to the Watcher but that same data has already been sent to the Responder"""
+
+
+class LocatorCache:
+    """
+    The LocatorCache keeps the data about the last ``cache_size`` blocks around so appointments can be checked against
+    it. The data is indexed by locator and it's mainly built during the normal ``Watcher`` operation so no extra steps
+    are normally needed.
+
+    Args:
+        blocks_in_cache (:obj:`int`): the numbers of blocks to keep in the cache.
+
+    Attributes:
+        cache (:obj:`dict`): a dictionary of ``locator:dispute_txid`` pairs that received appointments are checked
+            against.
+        blocks (:obj:`OrderedDict`): An ordered dictionary of the last ``blocks_in_cache`` blocks (block_hash:locators).
+            Used to keep track of what data belongs to what block, so data can be pruned accordingly. Also needed to
+            rebuild the cache in case of reorgs.
+        cache_size (:obj:`int`): the size of the cache in blocks.
+    """
+
+    def __init__(self, blocks_in_cache):
+        self.cache = dict()
+        self.blocks = OrderedDict()
+        self.cache_size = blocks_in_cache
+        self.rw_lock = rwlock.RWLockWrite()
+
+    def init(self, last_known_block, block_processor):
+        """
+        Sets the initial state of the locator cache.
+
+        Args:
+            last_known_block (:obj:`str`): the last known block by the ``Watcher``.
+            block_processor (:obj:`teos.block_processor.BlockProcessor`): a ``BlockProcessor`` instance.
+        """
+
+        # This is needed as a separate method from __init__ since it has to be initialized right before start watching.
+        # Not doing so implies store temporary variables in the Watcher and initialising the cache as None.
+        target_block_hash = last_known_block
+        for _ in range(self.cache_size):
+            # In some setups, like regtest, it could be the case that there are no enough previous blocks.
+            # In those cases we pull as many as we can (up to cache_size).
+            if not target_block_hash:
+                break
+
+            target_block = block_processor.get_block(target_block_hash)
+            if not target_block:
+                break
+
+            locator_txid_map = {compute_locator(txid): txid for txid in target_block.get("tx")}
+            self.cache.update(locator_txid_map)
+            self.blocks[target_block_hash] = list(locator_txid_map.keys())
+            target_block_hash = target_block.get("previousblockhash")
+
+        self.blocks = OrderedDict(reversed((list(self.blocks.items()))))
+
+    def get_txid(self, locator):
+        """
+        Gets a txid from the locator cache.
+
+        Args:
+            locator (:obj:`str`): the locator to lookup in the cache.
+
+        Returns:
+            :obj:`str` or :obj:`None`: The txid linked to the given locator if found. None otherwise.
+        """
+
+        with self.rw_lock.gen_rlock():
+            locator = self.cache.get(locator)
+        return locator
+
+    def update(self, block_hash, locator_txid_map):
+        """
+        Updates the cache with data from a new block. Removes the oldest block if the cache is full after the addition.
+
+        Args:
+            block_hash (:obj:`str`): the hash of the new block.
+            locator_txid_map (:obj:`dict`): the dictionary of locators (locator:txid) derived from a list of transaction
+                ids.
+        """
+
+        with self.rw_lock.gen_wlock():
+            self.cache.update(locator_txid_map)
+            self.blocks[block_hash] = list(locator_txid_map.keys())
+            logger.debug("Block added to cache", block_hash=block_hash)
+
+        if self.is_full():
+            self.remove_oldest_block()
+
+    def is_full(self):
+        """  Returns whether the cache is full or not """
+        with self.rw_lock.gen_rlock():
+            full = len(self.blocks) > self.cache_size
+        return full
+
+    def remove_oldest_block(self):
+        """ Removes the oldest block from the cache """
+        with self.rw_lock.gen_wlock():
+            block_hash, locators = self.blocks.popitem(last=False)
+            for locator in locators:
+                del self.cache[locator]
+
+        logger.debug("Block removed from cache", block_hash=block_hash)
+
+    def fix(self, last_known_block, block_processor):
+        """
+        Fixes the cache after a reorg has been detected by feeding the most recent ``cache_size`` blocks to it.
+
+        Args:
+            last_known_block (:obj:`str`): the last known block hash after the reorg.
+            block_processor (:obj:`teos.block_processor.BlockProcessor`): a ``BlockProcessor`` instance.
+        """
+
+        tmp_cache = LocatorCache(self.cache_size)
+
+        # We assume there are no reorgs back to genesis. If so, this would raise some log warnings. And the cache will
+        # be filled with less than cache_size blocks.
+        target_block_hash = last_known_block
+        for _ in range(tmp_cache.cache_size):
+            target_block = block_processor.get_block(target_block_hash)
+            if target_block:
+                # Compute the locator:txid pair for every transaction in the block and update both the cache and
+                # the block mapping.
+                locator_txid_map = {compute_locator(txid): txid for txid in target_block.get("tx")}
+                tmp_cache.cache.update(locator_txid_map)
+                tmp_cache.blocks[target_block_hash] = list(locator_txid_map.keys())
+                target_block_hash = target_block.get("previousblockhash")
+
+        with self.rw_lock.gen_wlock():
+            self.blocks = OrderedDict(reversed((list(tmp_cache.blocks.items()))))
+            self.cache = tmp_cache.cache
+
+
 class Watcher:
     """
     The :class:`Watcher` is in charge of watching for channel breaches for the appointments accepted by the tower.
@@ -41,6 +178,8 @@ class Watcher:
         responder (:obj:`Responder <teos.responder.Responder>`): a ``Responder`` instance.
         sk_der (:obj:`bytes`): a DER encoded private key used to sign appointment receipts (signaling acceptance).
         max_appointments (:obj:`int`): the maximum amount of appointments accepted by the ``Watcher`` at the same time.
+        blocks_in_cache (:obj:`int`): the number of blocks to keep in cache so recently triggered appointments can be
+            covered.
 
     Attributes:
         appointments (:obj:`dict`): a dictionary containing a summary of the appointments (:obj:`ExtendedAppointment
@@ -60,13 +199,14 @@ class Watcher:
         signing_key (:mod:`PrivateKey`): a private key used to sign accepted appointments.
         max_appointments (:obj:`int`): the maximum amount of appointments accepted by the ``Watcher`` at the same time.
         last_known_block (:obj:`str`): the last block known by the ``Watcher``.
+        locator_cache (:obj:`LocatorCache`): a cache of locators for the last ``blocks_in_cache`` blocks.
 
     Raises:
         :obj:`InvalidKey <common.exceptions.InvalidKey>`: if teos sk cannot be loaded.
 
     """
 
-    def __init__(self, db_manager, gatekeeper, block_processor, responder, sk_der, max_appointments):
+    def __init__(self, db_manager, gatekeeper, block_processor, responder, sk_der, max_appointments, blocks_in_cache):
         self.appointments = dict()
         self.locator_uuid_map = dict()
         self.block_queue = Queue()
@@ -77,6 +217,7 @@ class Watcher:
         self.max_appointments = max_appointments
         self.signing_key = Cryptographer.load_private_key_der(sk_der)
         self.last_known_block = db_manager.load_last_block_hash_watcher()
+        self.locator_cache = LocatorCache(blocks_in_cache)
 
     def awake(self):
         """Starts a new thread to monitor the blockchain for channel breaches"""
@@ -126,24 +267,55 @@ class Watcher:
         # The user_id needs to be added to the ExtendedAppointment once the former has been authenticated
         appointment.user_id = user_id
 
-        # The uuids are generated as the RIPMED160(locator||user_pubkey).
+        # The uuids are generated as the RIPEMD160(locator||user_pubkey).
         # If an appointment is requested by the user the uuid can be recomputed and queried straightaway (no maps).
         uuid = hash_160("{}{}".format(appointment.locator, user_id))
 
+        # If this is a copy of an appointment we've already reacted to, the new appointment is rejected.
+        if uuid in self.responder.trackers:
+            message = "Appointment already in Responder"
+            logger.info(message)
+            raise AppointmentAlreadyTriggered(message)
+
         # Add the appointment to the Gatekeeper
         available_slots = self.gatekeeper.add_update_appointment(user_id, uuid, appointment)
-        self.appointments[uuid] = appointment.get_summary()
 
-        if appointment.locator in self.locator_uuid_map:
-            # If the uuid is already in the map it means this is an update.
-            if uuid not in self.locator_uuid_map[appointment.locator]:
-                self.locator_uuid_map[appointment.locator].append(uuid)
+        # Appointments that were triggered in blocks held in the cache
+        dispute_txid = self.locator_cache.get_txid(appointment.locator)
+        if dispute_txid:
+            try:
+                penalty_txid, penalty_rawtx = self.check_breach(uuid, appointment, dispute_txid)
+                receipt = self.responder.handle_breach(
+                    uuid, appointment.locator, dispute_txid, penalty_txid, penalty_rawtx, user_id, self.last_known_block
+                )
+
+                # At this point the appointment is accepted but data is only kept if it goes through the Responder.
+                # Otherwise it is dropped.
+                if receipt.delivered:
+                    self.db_manager.store_watcher_appointment(uuid, appointment.to_dict())
+                    self.db_manager.create_append_locator_map(appointment.locator, uuid)
+                    self.db_manager.create_triggered_appointment_flag(uuid)
+
+            except (EncryptionError, InvalidTransactionFormat):
+                # If data inside the encrypted blob is invalid, the appointment is accepted but the data is dropped.
+                # (same as with data that bounces in the Responder). This reduces the appointment slot count so it
+                # could be used to discourage user misbehaviour.
+                pass
+
+        # Regular appointments that have not been triggered (or, at least, not recently)
         else:
-            # Otherwise two users have sent an appointment with the same locator, so we need to store both.
-            self.locator_uuid_map[appointment.locator] = [uuid]
+            self.appointments[uuid] = appointment.get_summary()
 
-        self.db_manager.store_watcher_appointment(uuid, appointment.to_dict())
-        self.db_manager.create_append_locator_map(appointment.locator, uuid)
+            if appointment.locator in self.locator_uuid_map:
+                # If the uuid is already in the map it means this is an update.
+                if uuid not in self.locator_uuid_map[appointment.locator]:
+                    self.locator_uuid_map[appointment.locator].append(uuid)
+            else:
+                # Otherwise two users have sent an appointment with the same locator, so we need to store both.
+                self.locator_uuid_map[appointment.locator] = [uuid]
+
+            self.db_manager.store_watcher_appointment(uuid, appointment.to_dict())
+            self.db_manager.create_append_locator_map(appointment.locator, uuid)
 
         try:
             signature = Cryptographer.sign(appointment.serialize(), self.signing_key)
@@ -157,6 +329,7 @@ class Watcher:
 
         return {
             "locator": appointment.locator,
+            "start_block": self.last_known_block,
             "signature": signature,
             "available_slots": available_slots,
             "subscription_expiry": self.gatekeeper.registered_users[user_id].subscription_expiry,
@@ -175,14 +348,24 @@ class Watcher:
             self.last_known_block = self.block_processor.get_best_block_hash()
             self.db_manager.store_last_block_hash_watcher(self.last_known_block)
 
+        # Initialise the locator cache with the last ``cache_size`` blocks.
+        self.locator_cache.init(self.last_known_block, self.block_processor)
+
         while True:
             block_hash = self.block_queue.get()
             block = self.block_processor.get_block(block_hash)
             logger.info("New block received", block_hash=block_hash, prev_block_hash=block.get("previousblockhash"))
 
-            if len(self.appointments) > 0 and block is not None:
-                txids = block.get("tx")
+            # If a reorg is detected, the cache is fixed to cover the last `cache_size` blocks of the new chain
+            if self.last_known_block != block.get("previousblockhash"):
+                self.locator_cache.fix(block_hash, self.block_processor)
 
+            txids = block.get("tx")
+            # Compute the locator for every transaction in the block and add them to the cache
+            locator_txid_map = {compute_locator(txid): txid for txid in txids}
+            self.locator_cache.update(block_hash, locator_txid_map)
+
+            if len(self.appointments) > 0 and locator_txid_map:
                 expired_appointments = self.gatekeeper.get_expired_appointments(block["height"])
                 # Make sure we only try to delete what is on the Watcher (some appointments may have been triggered)
                 expired_appointments = list(set(expired_appointments).intersection(self.appointments.keys()))
@@ -196,7 +379,7 @@ class Watcher:
                     expired_appointments, self.appointments, self.locator_uuid_map, self.db_manager
                 )
 
-                valid_breaches, invalid_breaches = self.filter_breaches(self.get_breaches(txids))
+                valid_breaches, invalid_breaches = self.filter_breaches(self.get_breaches(locator_txid_map))
 
                 triggered_flags = []
                 appointments_to_delete = []
@@ -246,28 +429,27 @@ class Watcher:
                 if len(self.appointments) != 0:
                     logger.info("No more pending appointments")
 
-            # Register the last processed block for the watcher
+            # Register the last processed block for the Watcher
             self.db_manager.store_last_block_hash_watcher(block_hash)
             self.last_known_block = block.get("hash")
             self.block_queue.task_done()
 
-    def get_breaches(self, txids):
+    def get_breaches(self, locator_txid_map):
         """
-        Gets a list of channel breaches given the list of transaction ids.
+        Gets a dictionary of channel breaches given a map of locator:dispute_txid.
 
         Args:
-            txids (:obj:`list`): the list of transaction ids included in the last received block.
+            locator_txid_map (:obj:`dict`): the dictionary of locators (locator:txid) derived from a list of
+                transaction ids.
 
         Returns:
             :obj:`dict`: A dictionary (``locator:txid``) with all the breaches found. An empty dictionary if none are
             found.
         """
 
-        potential_locators = {compute_locator(txid): txid for txid in txids}
-
         # Check is any of the tx_ids in the received block is an actual match
-        intersection = set(self.locator_uuid_map.keys()).intersection(potential_locators.keys())
-        breaches = {locator: potential_locators[locator] for locator in intersection}
+        intersection = set(self.locator_uuid_map.keys()).intersection(locator_txid_map.keys())
+        breaches = {locator: locator_txid_map[locator] for locator in intersection}
 
         if len(breaches) > 0:
             logger.info("List of breaches", breaches=breaches)
@@ -277,21 +459,59 @@ class Watcher:
 
         return breaches
 
+    def check_breach(self, uuid, appointment, dispute_txid):
+        """
+        Checks if a breach is valid. Valid breaches should decrypt to a valid transaction.
+
+        Args:
+            uuid (:obj:`str`): the uuid of the appointment that was triggered by the breach.
+            appointment (:obj:`teos.extended_appointment.ExtendedAppointment`): the appointment data.
+            dispute_txid (:obj:`str`): the id of the transaction that triggered the breach.
+
+        Returns:
+            :obj:`tuple`: A tuple containing the penalty txid and the raw penalty tx.
+
+        Raises:
+            :obj:`EncryptionError`: If the encrypted blob from the provided appointment cannot be decrypted with the
+            key derived from the breach transaction id.
+            :obj:`InvalidTransactionFormat`: If the decrypted data does not have a valid transaction format.
+        """
+
+        try:
+            penalty_rawtx = Cryptographer.decrypt(appointment.encrypted_blob, dispute_txid)
+            penalty_tx = self.block_processor.decode_raw_transaction(penalty_rawtx)
+
+        except EncryptionError as e:
+            logger.info("Transaction cannot be decrypted", uuid=uuid)
+            raise e
+
+        except InvalidTransactionFormat as e:
+            logger.info("The breach contained an invalid transaction", uuid=uuid)
+            raise e
+
+        logger.info(
+            "Breach found for locator", locator=appointment.locator, uuid=uuid, penalty_txid=penalty_tx.get("txid")
+        )
+
+        return penalty_tx.get("txid"), penalty_rawtx
+
     def filter_breaches(self, breaches):
         """
         Filters the valid from the invalid channel breaches.
 
-        The :obj:`Watcher` cannot if a given ``encrypted_blob`` contains a valid transaction until a breach if seen.
+        The :obj:`Watcher` cannot know if an ``encrypted_blob`` contains a valid transaction until a breach is seen.
         Blobs that contain arbitrary data are dropped and not sent to the :obj:`Responder <teos.responder.Responder>`.
 
         Args:
             breaches (:obj:`dict`): a dictionary containing channel breaches (``locator:txid``).
 
         Returns:
-            :obj:`dict`: A dictionary containing all the breaches flagged either as valid or invalid.
-            The structure is as follows:
+            :obj:`tuple`: A dictionary and a list. The former contains the valid breaches, while the latter contain the
+            invalid ones.
 
-            ``{locator, dispute_txid, penalty_txid, penalty_rawtx, valid_breach}``
+            The valid breaches dictionary has the following structure:
+
+            ``{locator, dispute_txid, penalty_txid, penalty_rawtx}``
         """
 
         valid_breaches = {}
@@ -305,31 +525,26 @@ class Watcher:
                 appointment = ExtendedAppointment.from_dict(self.db_manager.load_watcher_appointment(uuid))
 
                 if appointment.encrypted_blob in decrypted_blobs:
-                    penalty_tx, penalty_rawtx = decrypted_blobs[appointment.encrypted_blob]
-
-                else:
-                    try:
-                        penalty_rawtx = Cryptographer.decrypt(appointment.encrypted_blob, dispute_txid)
-
-                    except EncryptionError:
-                        penalty_rawtx = None
-
-                    penalty_tx = self.block_processor.decode_raw_transaction(penalty_rawtx)
-                    decrypted_blobs[appointment.encrypted_blob] = (penalty_tx, penalty_rawtx)
-
-                if penalty_tx is not None:
+                    penalty_txid, penalty_rawtx = decrypted_blobs[appointment.encrypted_blob]
                     valid_breaches[uuid] = {
-                        "locator": locator,
+                        "locator": appointment.locator,
                         "dispute_txid": dispute_txid,
-                        "penalty_txid": penalty_tx.get("txid"),
+                        "penalty_txid": penalty_txid,
                         "penalty_rawtx": penalty_rawtx,
                     }
 
-                    logger.info(
-                        "Breach found for locator", locator=locator, uuid=uuid, penalty_txid=penalty_tx.get("txid")
-                    )
-
                 else:
-                    invalid_breaches.append(uuid)
+                    try:
+                        penalty_txid, penalty_rawtx = self.check_breach(uuid, appointment, dispute_txid)
+                        valid_breaches[uuid] = {
+                            "locator": appointment.locator,
+                            "dispute_txid": dispute_txid,
+                            "penalty_txid": penalty_txid,
+                            "penalty_rawtx": penalty_rawtx,
+                        }
+                        decrypted_blobs[appointment.encrypted_blob] = (penalty_txid, penalty_rawtx)
+
+                    except (EncryptionError, InvalidTransactionFormat):
+                        invalid_breaches.append(uuid)
 
         return valid_breaches, invalid_breaches
diff --git a/test/teos/e2e/conftest.py b/test/teos/e2e/conftest.py
index d4bb314..67e8a38 100644
--- a/test/teos/e2e/conftest.py
+++ b/test/teos/e2e/conftest.py
@@ -11,6 +11,7 @@ from common.config_loader import ConfigLoader
 
 
 getcontext().prec = 10
+utxos = []
 
 
 @pytest.fixture(scope="session")
@@ -37,11 +38,13 @@ def prng_seed():
 def setup_node(bitcoin_cli):
     # This method will create a new address a mine bitcoin so the node can be used for testing
     new_addr = bitcoin_cli.getnewaddress()
-    bitcoin_cli.generatetoaddress(106, new_addr)
+    bitcoin_cli.generatetoaddress(200, new_addr)
 
 
 def create_txs(bitcoin_cli, n=1):
-    utxos = bitcoin_cli.listunspent()
+    global utxos
+    if not utxos:
+        utxos = bitcoin_cli.listunspent()
 
     if len(utxos) < n:
         raise ValueError("There're no enough UTXOs.")
diff --git a/test/teos/e2e/test_basic_e2e.py b/test/teos/e2e/test_basic_e2e.py
index dbcfa0f..d2781bc 100644
--- a/test/teos/e2e/test_basic_e2e.py
+++ b/test/teos/e2e/test_basic_e2e.py
@@ -40,6 +40,9 @@ teosd_process = run_teosd()
 
 teos_id, user_sk, user_id = teos_cli.load_keys(cli_config.get("TEOS_PUBLIC_KEY"), cli_config.get("CLI_PRIVATE_KEY"))
 
+appointments_in_watcher = 0
+appointments_in_responder = 0
+
 
 def broadcast_transaction_and_mine_block(bitcoin_cli, commitment_tx, addr):
     # Broadcast the commitment transaction and mine a block
@@ -78,6 +81,8 @@ def test_commands_non_registered(bitcoin_cli):
 
 
 def test_commands_registered(bitcoin_cli):
+    global appointments_in_watcher
+
     # Test registering and trying again
     teos_cli.register(user_id, teos_base_endpoint)
 
@@ -93,9 +98,12 @@ def test_commands_registered(bitcoin_cli):
     r = get_appointment_info(appointment_data.get("locator"))
     assert r.get("locator") == appointment.locator
     assert r.get("appointment") == appointment.to_dict()
+    appointments_in_watcher += 1
 
 
 def test_appointment_life_cycle(bitcoin_cli):
+    global appointments_in_watcher, appointments_in_responder
+
     # First of all we need to register
     response = teos_cli.register(user_id, teos_base_endpoint)
     available_slots = response.get("available_slots")
@@ -106,6 +114,7 @@ def test_appointment_life_cycle(bitcoin_cli):
     appointment_data = build_appointment_data(commitment_tx_id, penalty_tx)
     locator = compute_locator(commitment_tx_id)
     appointment, signature = add_appointment(appointment_data)
+    appointments_in_watcher += 1
 
     # Get the information from the tower to check that it matches
     appointment_info = get_appointment_info(locator)
@@ -117,7 +126,7 @@ def test_appointment_life_cycle(bitcoin_cli):
     all_appointments = get_all_appointments()
     watching = all_appointments.get("watcher_appointments")
     responding = all_appointments.get("responder_trackers")
-    assert len(watching) == 1 and len(responding) == 0
+    assert len(watching) == appointments_in_watcher and len(responding) == 0
 
     # Trigger a breach and check again
     new_addr = bitcoin_cli.getnewaddress()
@@ -125,11 +134,13 @@ def test_appointment_life_cycle(bitcoin_cli):
     appointment_info = get_appointment_info(locator)
     assert appointment_info.get("status") == "dispute_responded"
     assert appointment_info.get("locator") == locator
+    appointments_in_watcher -= 1
+    appointments_in_responder += 1
 
     all_appointments = get_all_appointments()
     watching = all_appointments.get("watcher_appointments")
     responding = all_appointments.get("responder_trackers")
-    assert len(watching) == 0 and len(responding) == 1
+    assert len(watching) == appointments_in_watcher and len(responding) == appointments_in_responder
 
     # It can be also checked by ensuring that the penalty transaction made it to the network
     penalty_tx_id = bitcoin_cli.decoderawtransaction(penalty_tx).get("txid")
@@ -144,6 +155,7 @@ def test_appointment_life_cycle(bitcoin_cli):
 
     # Now let's mine some blocks so the appointment reaches its end. We need 100 + EXPIRY_DELTA -1
     bitcoin_cli.generatetoaddress(100 + teos_config.get("EXPIRY_DELTA") - 1, new_addr)
+    appointments_in_responder -= 1
 
     # The appointment is no longer in the tower
     with pytest.raises(TowerResponseError):
@@ -152,10 +164,14 @@ def test_appointment_life_cycle(bitcoin_cli):
     # Check that the appointment is not in the Gatekeeper by checking the available slots (should have increase by 1)
     # We can do so by topping up the subscription (FIXME: find a better way to check this).
     response = teos_cli.register(user_id, teos_base_endpoint)
-    assert response.get("available_slots") == available_slots + teos_config.get("DEFAULT_SLOTS") + 1
+    assert (
+        response.get("available_slots")
+        == available_slots + teos_config.get("DEFAULT_SLOTS") + 1 - appointments_in_watcher - appointments_in_responder
+    )
 
 
 def test_multiple_appointments_life_cycle(bitcoin_cli):
+    global appointments_in_watcher, appointments_in_responder
     # Tests that get_all_appointments returns all the appointments the tower is storing at various stages in the
     # appointment lifecycle.
     appointments = []
@@ -180,6 +196,7 @@ def test_multiple_appointments_life_cycle(bitcoin_cli):
     # Send all of them to watchtower.
     for appt in appointments:
         add_appointment(appt.get("appointment_data"))
+        appointments_in_watcher += 1
 
     # Two of these appointments are breached, and the watchtower responds to them.
     breached_appointments = []
@@ -188,13 +205,15 @@ def test_multiple_appointments_life_cycle(bitcoin_cli):
         broadcast_transaction_and_mine_block(bitcoin_cli, appointments[i]["commitment_tx"], new_addr)
         bitcoin_cli.generatetoaddress(1, new_addr)
         breached_appointments.append(appointments[i]["locator"])
+        appointments_in_watcher -= 1
+        appointments_in_responder += 1
         sleep(1)
 
     # Test that they all show up in get_all_appointments at the correct stages.
     all_appointments = get_all_appointments()
     watching = all_appointments.get("watcher_appointments")
     responding = all_appointments.get("responder_trackers")
-    assert len(watching) == 3 and len(responding) == 2
+    assert len(watching) == appointments_in_watcher and len(responding) == appointments_in_responder
     responder_locators = [appointment["locator"] for uuid, appointment in responding.items()]
     assert set(responder_locators) == set(breached_appointments)
 
@@ -389,6 +408,73 @@ def test_two_appointment_same_locator_different_penalty_different_users(bitcoin_
     assert appointment_info.get("appointment").get("penalty_tx") == appointment1_data.get("penalty_tx")
 
 
+def test_add_appointment_trigger_on_cache(bitcoin_cli):
+    # This tests sending an appointment whose trigger is in the cache
+    commitment_tx, penalty_tx = create_txs(bitcoin_cli)
+    commitment_tx_id = bitcoin_cli.decoderawtransaction(commitment_tx).get("txid")
+    appointment_data = build_appointment_data(commitment_tx_id, penalty_tx)
+    locator = compute_locator(commitment_tx_id)
+
+    # Let's send the commitment to the network and mine a block
+    broadcast_transaction_and_mine_block(bitcoin_cli, commitment_tx, bitcoin_cli.getnewaddress())
+
+    # Send the data to the tower and request it back. It should have gone straightaway to the Responder
+    add_appointment(appointment_data)
+    assert get_appointment_info(locator).get("status") == "dispute_responded"
+
+
+def test_add_appointment_invalid_trigger_on_cache(bitcoin_cli):
+    # This tests sending an invalid appointment which trigger is in the cache
+    commitment_tx, penalty_tx = create_txs(bitcoin_cli)
+    commitment_tx_id = bitcoin_cli.decoderawtransaction(commitment_tx).get("txid")
+
+    # We can just flip the justice tx so it is invalid
+    appointment_data = build_appointment_data(commitment_tx_id, penalty_tx[::-1])
+    locator = compute_locator(commitment_tx_id)
+
+    # Let's send the commitment to the network and mine a block
+    broadcast_transaction_and_mine_block(bitcoin_cli, commitment_tx, bitcoin_cli.getnewaddress())
+    sleep(1)
+
+    # Send the data to the tower and request it back. It should get accepted but the data will be dropped.
+    add_appointment(appointment_data)
+    with pytest.raises(TowerResponseError):
+        get_appointment_info(locator)
+
+
+def test_add_appointment_trigger_on_cache_cannot_decrypt(bitcoin_cli):
+    commitment_tx, penalty_tx = create_txs(bitcoin_cli)
+
+    # Let's send the commitment to the network and mine a block
+    broadcast_transaction_and_mine_block(bitcoin_cli, commitment_tx, bitcoin_cli.getnewaddress())
+    sleep(1)
+
+    # The appointment data is built using a random 32-byte value.
+    appointment_data = build_appointment_data(get_random_value_hex(32), penalty_tx)
+
+    # We cannot use teos_cli.add_appointment here since it computes the locator internally, so let's do it manually.
+    appointment_data["locator"] = compute_locator(bitcoin_cli.decoderawtransaction(commitment_tx).get("txid"))
+    appointment_data["encrypted_blob"] = Cryptographer.encrypt(penalty_tx, get_random_value_hex(32))
+    appointment = Appointment.from_dict(appointment_data)
+
+    signature = Cryptographer.sign(appointment.serialize(), user_sk)
+    data = {"appointment": appointment.to_dict(), "signature": signature}
+
+    # Send appointment to the server.
+    response = teos_cli.post_request(data, teos_add_appointment_endpoint)
+    response_json = teos_cli.process_post_response(response)
+
+    # Check that the server has accepted the appointment
+    signature = response_json.get("signature")
+    rpk = Cryptographer.recover_pk(appointment.serialize(), signature)
+    assert teos_id == Cryptographer.get_compressed_pk(rpk)
+    assert response_json.get("locator") == appointment.locator
+
+    # The appointment should should have been inmediately dropped
+    with pytest.raises(TowerResponseError):
+        get_appointment_info(appointment_data["locator"])
+
+
 def test_appointment_shutdown_teos_trigger_back_online(bitcoin_cli):
     global teosd_process
 
diff --git a/test/teos/unit/test_api.py b/test/teos/unit/test_api.py
index daac059..4f3930a 100644
--- a/test/teos/unit/test_api.py
+++ b/test/teos/unit/test_api.py
@@ -4,13 +4,21 @@ from binascii import hexlify
 
 from teos.api import API
 import common.errors as errors
-from teos.watcher import Watcher
 from teos.inspector import Inspector
 from teos.gatekeeper import UserInfo
 from teos.appointments_dbm import AppointmentsDBM
 from teos.responder import Responder, TransactionTracker
+from teos.extended_appointment import ExtendedAppointment
+from teos.watcher import Watcher, AppointmentAlreadyTriggered
 
-from test.teos.unit.conftest import get_random_value_hex, generate_dummy_appointment, generate_keypair, get_config
+from test.teos.unit.conftest import (
+    get_random_value_hex,
+    generate_dummy_appointment,
+    generate_keypair,
+    get_config,
+    create_dummy_transaction,
+    compute_locator,
+)
 
 from common.cryptographer import Cryptographer, hash_160
 from common.constants import (
@@ -60,7 +68,15 @@ def api(db_manager, carrier, block_processor, gatekeeper, run_bitcoind):
     sk, pk = generate_keypair()
 
     responder = Responder(db_manager, gatekeeper, carrier, block_processor)
-    watcher = Watcher(db_manager, gatekeeper, block_processor, responder, sk.to_der(), MAX_APPOINTMENTS)
+    watcher = Watcher(
+        db_manager,
+        gatekeeper,
+        block_processor,
+        responder,
+        sk.to_der(),
+        MAX_APPOINTMENTS,
+        config.get("LOCATOR_CACHE_SIZE"),
+    )
     inspector = Inspector(block_processor, config.get("MIN_TO_SELF_DELAY"))
     api = API(config.get("API_HOST"), config.get("API_PORT"), inspector, watcher)
 
@@ -157,6 +173,7 @@ def test_add_appointment(api, client, appointment):
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
     assert r.status_code == HTTP_OK
     assert r.json.get("available_slots") == 0
+    assert r.json.get("start_block") == api.watcher.last_known_block
 
 
 def test_add_appointment_no_json(api, client, appointment):
@@ -242,6 +259,7 @@ def test_add_appointment_multiple_times_same_user(api, client, appointment, n=MU
         r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
         assert r.status_code == HTTP_OK
         assert r.json.get("available_slots") == n - 1
+        assert r.json.get("start_block") == api.watcher.last_known_block
 
     # Since all updates came from the same user, only the last one is stored
     assert len(api.watcher.locator_uuid_map[appointment.locator]) == 1
@@ -264,6 +282,7 @@ def test_add_appointment_multiple_times_different_users(api, client, appointment
         r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": signature}, compressed_pk)
         assert r.status_code == HTTP_OK
         assert r.json.get("available_slots") == 1
+        assert r.json.get("start_block") == api.watcher.last_known_block
 
     # Check that all the appointments have been added and that there are no duplicates
     assert len(set(api.watcher.locator_uuid_map[appointment.locator])) == n
@@ -275,14 +294,22 @@ def test_add_appointment_update_same_size(api, client, appointment):
 
     appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
-    assert r.status_code == HTTP_OK and r.json.get("available_slots") == 0
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
 
     # The user has no additional slots, but it should be able to update
     # Let's just reverse the encrypted blob for example
     appointment.encrypted_blob = appointment.encrypted_blob[::-1]
     appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
-    assert r.status_code == HTTP_OK and r.json.get("available_slots") == 0
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
 
 
 def test_add_appointment_update_bigger(api, client, appointment):
@@ -297,7 +324,11 @@ def test_add_appointment_update_bigger(api, client, appointment):
     appointment.encrypted_blob = TWO_SLOTS_BLOTS
     appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
-    assert r.status_code == HTTP_OK and r.json.get("available_slots") == 0
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
 
     # Check that it'll fail if no enough slots are available
     # Double the size from before
@@ -314,13 +345,101 @@ def test_add_appointment_update_smaller(api, client, appointment):
     appointment.encrypted_blob = TWO_SLOTS_BLOTS
     appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
-    assert r.status_code == HTTP_OK and r.json.get("available_slots") == 0
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
 
     # Let's update with one just small enough
     appointment.encrypted_blob = "A" * (ENCRYPTED_BLOB_MAX_SIZE_HEX - 2)
     appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
     r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
-    assert r.status_code == HTTP_OK and r.json.get("available_slots") == 1
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 1
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
+
+
+def test_add_appointment_in_cache(api, client):
+    api.watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=0)
+    appointment, dispute_tx = generate_dummy_appointment()
+    appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
+
+    # Add the data to the cache
+    dispute_txid = api.watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
+    api.watcher.locator_cache.cache[appointment.locator] = dispute_txid
+
+    r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
+
+    # Trying to add it again should fail, since it is already in the Responder
+    r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
+    assert r.status_code == HTTP_BAD_REQUEST and r.json.get("error_code") == errors.APPOINTMENT_ALREADY_TRIGGERED
+
+    # The appointment would be rejected even if the data is not in the cache provided it has been triggered
+    del api.watcher.locator_cache.cache[appointment.locator]
+    r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
+    assert r.status_code == HTTP_BAD_REQUEST and r.json.get("error_code") == errors.APPOINTMENT_ALREADY_TRIGGERED
+
+
+def test_add_appointment_in_cache_cannot_decrypt(api, client):
+    api.watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=0)
+    appointment, dispute_tx = generate_dummy_appointment()
+    appointment.encrypted_blob = appointment.encrypted_blob[::-1]
+    appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
+
+    # Add the data to the cache
+    dispute_txid = api.watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
+    api.watcher.locator_cache.cache[dispute_txid] = appointment.locator
+
+    # The appointment should be accepted
+    r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
+
+
+def test_add_appointment_in_cache_invalid_transaction(api, client):
+    api.watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=0)
+
+    # We need to create the appointment manually
+    dispute_tx = create_dummy_transaction()
+    dispute_txid = dispute_tx.tx_id.hex()
+    penalty_tx = create_dummy_transaction(dispute_txid)
+
+    locator = compute_locator(dispute_txid)
+    dummy_appointment_data = {"tx": penalty_tx.hex(), "tx_id": dispute_txid, "to_self_delay": 20}
+    encrypted_blob = Cryptographer.encrypt(dummy_appointment_data.get("tx")[::-1], dummy_appointment_data.get("tx_id"))
+
+    appointment_data = {
+        "locator": locator,
+        "to_self_delay": dummy_appointment_data.get("to_self_delay"),
+        "encrypted_blob": encrypted_blob,
+        "user_id": get_random_value_hex(16),
+    }
+
+    appointment = ExtendedAppointment.from_dict(appointment_data)
+    api.watcher.locator_cache.cache[appointment.locator] = dispute_tx.tx_id.hex()
+    appointment_signature = Cryptographer.sign(appointment.serialize(), user_sk)
+
+    # Add the data to the cache
+    api.watcher.locator_cache.cache[dispute_txid] = appointment.locator
+
+    # The appointment should be accepted
+    r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
+    assert (
+        r.status_code == HTTP_OK
+        and r.json.get("available_slots") == 0
+        and r.json.get("start_block") == api.watcher.last_known_block
+    )
 
 
 def test_add_too_many_appointment(api, client):
@@ -337,7 +456,7 @@ def test_add_too_many_appointment(api, client):
         r = add_appointment(client, {"appointment": appointment.to_dict(), "signature": appointment_signature}, user_id)
 
         if i < free_appointment_slots:
-            assert r.status_code == HTTP_OK
+            assert r.status_code == HTTP_OK and r.json.get("start_block") == api.watcher.last_known_block
         else:
             assert r.status_code == HTTP_SERVICE_UNAVAILABLE
 
diff --git a/test/teos/unit/test_block_processor.py b/test/teos/unit/test_block_processor.py
index f61082c..4a0bf88 100644
--- a/test/teos/unit/test_block_processor.py
+++ b/test/teos/unit/test_block_processor.py
@@ -1,3 +1,5 @@
+import pytest
+from teos.watcher import InvalidTransactionFormat
 from test.teos.unit.conftest import get_random_value_hex, generate_block, generate_blocks, fork
 
 
@@ -46,7 +48,8 @@ def test_decode_raw_transaction(block_processor):
 
 def test_decode_raw_transaction_invalid(block_processor):
     # Same but with an invalid one
-    assert block_processor.decode_raw_transaction(hex_tx[::-1]) is None
+    with pytest.raises(InvalidTransactionFormat):
+        block_processor.decode_raw_transaction(hex_tx[::-1])
 
 
 def test_get_missed_blocks(block_processor):
diff --git a/test/teos/unit/test_builder.py b/test/teos/unit/test_builder.py
index f804e54..581581e 100644
--- a/test/teos/unit/test_builder.py
+++ b/test/teos/unit/test_builder.py
@@ -102,6 +102,7 @@ def test_update_states_empty_list(db_manager, gatekeeper, carrier, block_process
         responder=Responder(db_manager, gatekeeper, carrier, block_processor),
         sk_der=generate_keypair()[0].to_der(),
         max_appointments=config.get("MAX_APPOINTMENTS"),
+        blocks_in_cache=config.get("LOCATOR_CACHE_SIZE"),
     )
 
     missed_blocks_watcher = []
@@ -123,6 +124,7 @@ def test_update_states_responder_misses_more(run_bitcoind, db_manager, gatekeepe
         responder=Responder(db_manager, gatekeeper, carrier, block_processor),
         sk_der=generate_keypair()[0].to_der(),
         max_appointments=config.get("MAX_APPOINTMENTS"),
+        blocks_in_cache=config.get("LOCATOR_CACHE_SIZE"),
     )
 
     blocks = []
@@ -148,6 +150,7 @@ def test_update_states_watcher_misses_more(db_manager, gatekeeper, carrier, bloc
         responder=Responder(db_manager, gatekeeper, carrier, block_processor),
         sk_der=generate_keypair()[0].to_der(),
         max_appointments=config.get("MAX_APPOINTMENTS"),
+        blocks_in_cache=config.get("LOCATOR_CACHE_SIZE"),
     )
 
     blocks = []
diff --git a/test/teos/unit/test_watcher.py b/test/teos/unit/test_watcher.py
index 25f84e5..79d7a93 100644
--- a/test/teos/unit/test_watcher.py
+++ b/test/teos/unit/test_watcher.py
@@ -1,6 +1,7 @@
 import pytest
 from uuid import uuid4
 from shutil import rmtree
+from copy import deepcopy
 from threading import Thread
 from coincurve import PrivateKey
 
@@ -9,22 +10,32 @@ from teos.tools import bitcoin_cli
 from teos.responder import Responder
 from teos.gatekeeper import UserInfo
 from teos.chain_monitor import ChainMonitor
-from teos.appointments_dbm import AppointmentsDBM
 from teos.block_processor import BlockProcessor
-from teos.watcher import Watcher, AppointmentLimitReached
+from teos.appointments_dbm import AppointmentsDBM
+from teos.extended_appointment import ExtendedAppointment
 from teos.gatekeeper import Gatekeeper, AuthenticationFailure, NotEnoughSlots
+from teos.watcher import (
+    Watcher,
+    AppointmentLimitReached,
+    LocatorCache,
+    EncryptionError,
+    InvalidTransactionFormat,
+    AppointmentAlreadyTriggered,
+)
 
 from common.tools import compute_locator
 from common.cryptographer import Cryptographer
 
 from test.teos.unit.conftest import (
     generate_blocks_w_delay,
+    generate_blocks,
     generate_dummy_appointment,
     get_random_value_hex,
     generate_keypair,
     get_config,
     bitcoind_feed_params,
     bitcoind_connect_params,
+    create_dummy_transaction,
 )
 
 APPOINTMENTS = 5
@@ -55,7 +66,15 @@ def watcher(db_manager, gatekeeper):
     carrier = Carrier(bitcoind_connect_params)
 
     responder = Responder(db_manager, gatekeeper, carrier, block_processor)
-    watcher = Watcher(db_manager, gatekeeper, block_processor, responder, signing_key.to_der(), MAX_APPOINTMENTS)
+    watcher = Watcher(
+        db_manager,
+        gatekeeper,
+        block_processor,
+        responder,
+        signing_key.to_der(),
+        MAX_APPOINTMENTS,
+        config.get("LOCATOR_CACHE_SIZE"),
+    )
 
     chain_monitor = ChainMonitor(
         watcher.block_queue, watcher.responder.block_queue, block_processor, bitcoind_feed_params
@@ -91,7 +110,198 @@ def create_appointments(n):
     return appointments, locator_uuid_map, dispute_txs
 
 
-def test_init(run_bitcoind, watcher):
+def test_locator_cache_init_not_enough_blocks(run_bitcoind, block_processor):
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+    # Make sure there are at least 3 blocks
+    block_count = block_processor.get_block_count()
+    if block_count < 3:
+        generate_blocks_w_delay(3 - block_count)
+
+    # Simulate there are only 3 blocks
+    third_block_hash = bitcoin_cli(bitcoind_connect_params).getblockhash(2)
+    locator_cache.init(third_block_hash, block_processor)
+    assert len(locator_cache.blocks) == 3
+    for k, v in locator_cache.blocks.items():
+        assert block_processor.get_block(k)
+
+
+def test_locator_cache_init(block_processor):
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+
+    # Generate enough blocks so the cache can start full
+    generate_blocks(2 * locator_cache.cache_size)
+
+    locator_cache.init(block_processor.get_best_block_hash(), block_processor)
+    assert len(locator_cache.blocks) == locator_cache.cache_size
+    for k, v in locator_cache.blocks.items():
+        assert block_processor.get_block(k)
+
+
+def test_get_txid():
+    # Not much to test here, this is shadowing dict.get
+    locator = get_random_value_hex(16)
+    txid = get_random_value_hex(32)
+
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+    locator_cache.cache[locator] = txid
+
+    assert locator_cache.get_txid(locator) == txid
+
+    # A random locator should fail
+    assert locator_cache.get_txid(get_random_value_hex(16)) is None
+
+
+def test_update_cache():
+    # Update should add data about a new block in the cache. If the cache is full, the oldest block is dropped.
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+
+    block_hash = get_random_value_hex(32)
+    txs = [get_random_value_hex(32) for _ in range(10)]
+    locator_txid_map = {compute_locator(txid): txid for txid in txs}
+
+    # Cache is empty
+    assert block_hash not in locator_cache.blocks
+    for locator in locator_txid_map.keys():
+        assert locator not in locator_cache.cache
+
+    # The data has been added to the cache
+    locator_cache.update(block_hash, locator_txid_map)
+    assert block_hash in locator_cache.blocks
+    for locator in locator_txid_map.keys():
+        assert locator in locator_cache.cache
+
+
+def test_update_cache_full():
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+    block_hashes = []
+    big_map = {}
+
+    for i in range(locator_cache.cache_size):
+        block_hash = get_random_value_hex(32)
+        txs = [get_random_value_hex(32) for _ in range(10)]
+        locator_txid_map = {compute_locator(txid): txid for txid in txs}
+        locator_cache.update(block_hash, locator_txid_map)
+
+        if i == 0:
+            first_block_hash = block_hash
+            first_locator_txid_map = locator_txid_map
+        else:
+            block_hashes.append(block_hash)
+            big_map.update(locator_txid_map)
+
+    # The cache is now full.
+    assert first_block_hash in locator_cache.blocks
+    for locator in first_locator_txid_map.keys():
+        assert locator in locator_cache.cache
+
+    # Add one more
+    block_hash = get_random_value_hex(32)
+    txs = [get_random_value_hex(32) for _ in range(10)]
+    locator_txid_map = {compute_locator(txid): txid for txid in txs}
+    locator_cache.update(block_hash, locator_txid_map)
+
+    # The first block is not there anymore, but the rest are there
+    assert first_block_hash not in locator_cache.blocks
+    for locator in first_locator_txid_map.keys():
+        assert locator not in locator_cache.cache
+
+    for block_hash in block_hashes:
+        assert block_hash in locator_cache.blocks
+
+    for locator in big_map.keys():
+        assert locator in locator_cache.cache
+
+
+def test_locator_cache_is_full(block_processor):
+    # Empty cache
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+
+    for _ in range(locator_cache.cache_size):
+        locator_cache.blocks[uuid4().hex] = 0
+        assert not locator_cache.is_full()
+
+    locator_cache.blocks[uuid4().hex] = 0
+    assert locator_cache.is_full()
+
+
+def test_locator_remove_oldest_block(block_processor):
+    # Empty cache
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+
+    # Add some blocks to the cache
+    for _ in range(locator_cache.cache_size):
+        txid = get_random_value_hex(32)
+        locator = txid[:16]
+        locator_cache.blocks[get_random_value_hex(32)] = {locator: txid}
+        locator_cache.cache[locator] = txid
+
+    blocks_in_cache = locator_cache.blocks
+    oldest_block_hash = list(blocks_in_cache.keys())[0]
+    oldest_block_data = blocks_in_cache.get(oldest_block_hash)
+    rest_of_blocks = list(blocks_in_cache.keys())[1:]
+    locator_cache.remove_oldest_block()
+
+    # Oldest block data is not in the cache
+    assert oldest_block_hash not in locator_cache.blocks
+    for locator in oldest_block_data:
+        assert locator not in locator_cache.cache
+
+    # The rest of data is in the cache
+    assert set(rest_of_blocks).issubset(locator_cache.blocks)
+    for block_hash in rest_of_blocks:
+        for locator in locator_cache.blocks[block_hash]:
+            assert locator in locator_cache.cache
+
+
+def test_fix_cache(block_processor):
+    # This tests how a reorg will create a new version of the cache
+    # Let's start setting a full cache. We'll mine ``cache_size`` bocks to be sure it's full
+    generate_blocks_w_delay((config.get("LOCATOR_CACHE_SIZE")))
+
+    locator_cache = LocatorCache(config.get("LOCATOR_CACHE_SIZE"))
+    locator_cache.init(block_processor.get_best_block_hash(), block_processor)
+    assert len(locator_cache.blocks) == locator_cache.cache_size
+
+    # Now let's fake a reorg of less than ``cache_size``. We'll go two blocks into the past.
+    current_tip = block_processor.get_best_block_hash()
+    current_tip_locators = locator_cache.blocks[current_tip]
+    current_tip_parent = block_processor.get_block(current_tip).get("previousblockhash")
+    current_tip_parent_locators = locator_cache.blocks[current_tip_parent]
+    fake_tip = block_processor.get_block(current_tip_parent).get("previousblockhash")
+    locator_cache.fix(fake_tip, block_processor)
+
+    # The last two blocks are not in the cache nor are the any of its locators
+    assert current_tip not in locator_cache.blocks and current_tip_parent not in locator_cache.blocks
+    for locator in current_tip_parent_locators + current_tip_locators:
+        assert locator not in locator_cache.cache
+
+    # The fake tip is the new tip, and two additional blocks are at the bottom
+    assert fake_tip in locator_cache.blocks and list(locator_cache.blocks.keys())[-1] == fake_tip
+    assert len(locator_cache.blocks) == locator_cache.cache_size
+
+    # Test the same for a full cache reorg. We can simulate this by adding more blocks than the cache can fit and
+    # trigger a fix. We'll use a new cache to compare with the old
+    old_cache_blocks = deepcopy(locator_cache.blocks)
+
+    generate_blocks_w_delay((config.get("LOCATOR_CACHE_SIZE") * 2))
+    locator_cache.fix(block_processor.get_best_block_hash(), block_processor)
+
+    # None of the data from the old cache is in the new cache
+    for block_hash, locators in old_cache_blocks.items():
+        assert block_hash not in locator_cache.blocks
+        for locator in locators:
+            assert locator not in locator_cache.cache
+
+    # The data in the new cache corresponds to the last ``cache_size`` blocks.
+    block_count = block_processor.get_block_count()
+    for i in range(block_count, block_count - locator_cache.cache_size, -1):
+        block_hash = bitcoin_cli(bitcoind_connect_params).getblockhash(i - 1)
+        assert block_hash in locator_cache.blocks
+        for locator in locator_cache.blocks[block_hash]:
+            assert locator in locator_cache.cache
+
+
+def test_watcher_init(watcher):
     assert isinstance(watcher.appointments, dict) and len(watcher.appointments) == 0
     assert isinstance(watcher.locator_uuid_map, dict) and len(watcher.locator_uuid_map) == 0
     assert watcher.block_queue.empty()
@@ -101,6 +311,7 @@ def test_init(run_bitcoind, watcher):
     assert isinstance(watcher.responder, Responder)
     assert isinstance(watcher.max_appointments, int)
     assert isinstance(watcher.signing_key, PrivateKey)
+    assert isinstance(watcher.locator_cache, LocatorCache)
 
 
 def test_add_appointment_non_registered(watcher):
@@ -171,6 +382,102 @@ def test_add_appointment(watcher):
     assert len(watcher.locator_uuid_map[appointment.locator]) == 2
 
 
+def test_add_appointment_in_cache(watcher):
+    # Generate an appointment and add the dispute txid to the cache
+    user_sk, user_pk = generate_keypair()
+    user_id = Cryptographer.get_compressed_pk(user_pk)
+    watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=10)
+
+    appointment, dispute_tx = generate_dummy_appointment()
+    dispute_txid = watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
+    watcher.locator_cache.cache[appointment.locator] = dispute_txid
+
+    # Try to add the appointment
+    response = watcher.add_appointment(appointment, Cryptographer.sign(appointment.serialize(), user_sk))
+
+    # The appointment is accepted but it's not in the Watcher
+    assert (
+        response
+        and response.get("locator") == appointment.locator
+        and Cryptographer.get_compressed_pk(watcher.signing_key.public_key)
+        == Cryptographer.get_compressed_pk(Cryptographer.recover_pk(appointment.serialize(), response.get("signature")))
+    )
+    assert not watcher.locator_uuid_map.get(appointment.locator)
+
+    # It went to the Responder straightaway
+    assert appointment.locator in [tracker.get("locator") for tracker in watcher.responder.trackers.values()]
+
+    # Trying to send it again should fail since it is already in the Responder
+    with pytest.raises(AppointmentAlreadyTriggered):
+        watcher.add_appointment(appointment, Cryptographer.sign(appointment.serialize(), user_sk))
+
+
+def test_add_appointment_in_cache_invalid_blob(watcher):
+    # Generate an appointment with an invalid transaction and add the dispute txid to the cache
+    user_sk, user_pk = generate_keypair()
+    user_id = Cryptographer.get_compressed_pk(user_pk)
+    watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=10)
+
+    # We need to create the appointment manually
+    dispute_tx = create_dummy_transaction()
+    dispute_txid = dispute_tx.tx_id.hex()
+    penalty_tx = create_dummy_transaction(dispute_txid)
+
+    locator = compute_locator(dispute_txid)
+    dummy_appointment_data = {"tx": penalty_tx.hex(), "tx_id": dispute_txid, "to_self_delay": 20}
+    encrypted_blob = Cryptographer.encrypt(dummy_appointment_data.get("tx")[::-1], dummy_appointment_data.get("tx_id"))
+
+    appointment_data = {
+        "locator": locator,
+        "to_self_delay": dummy_appointment_data.get("to_self_delay"),
+        "encrypted_blob": encrypted_blob,
+        "user_id": get_random_value_hex(16),
+    }
+
+    appointment = ExtendedAppointment.from_dict(appointment_data)
+    watcher.locator_cache.cache[appointment.locator] = dispute_tx.tx_id.hex()
+
+    # Try to add the appointment
+    response = watcher.add_appointment(appointment, Cryptographer.sign(appointment.serialize(), user_sk))
+
+    # The appointment is accepted but dropped (same as an invalid appointment that gets triggered)
+    assert (
+        response
+        and response.get("locator") == appointment.locator
+        and Cryptographer.get_compressed_pk(watcher.signing_key.public_key)
+        == Cryptographer.get_compressed_pk(Cryptographer.recover_pk(appointment.serialize(), response.get("signature")))
+    )
+
+    assert not watcher.locator_uuid_map.get(appointment.locator)
+    assert appointment.locator not in [tracker.get("locator") for tracker in watcher.responder.trackers.values()]
+
+
+def test_add_appointment_in_cache_invalid_transaction(watcher):
+    # Generate an appointment that cannot be decrypted and add the dispute txid to the cache
+    user_sk, user_pk = generate_keypair()
+    user_id = Cryptographer.get_compressed_pk(user_pk)
+    watcher.gatekeeper.registered_users[user_id] = UserInfo(available_slots=1, subscription_expiry=10)
+
+    appointment, dispute_tx = generate_dummy_appointment()
+    appointment.encrypted_blob = appointment.encrypted_blob[::-1]
+    dispute_txid = watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
+    watcher.locator_cache.cache[appointment.locator] = dispute_txid
+
+    # Try to add the appointment
+    response = watcher.add_appointment(appointment, Cryptographer.sign(appointment.serialize(), user_sk))
+
+    # The appointment is accepted but dropped (same as an invalid appointment that gets triggered)
+    assert (
+        response
+        and response.get("locator") == appointment.locator
+        and Cryptographer.get_compressed_pk(watcher.signing_key.public_key)
+        == Cryptographer.get_compressed_pk(Cryptographer.recover_pk(appointment.serialize(), response.get("signature")))
+    )
+
+    assert not watcher.locator_uuid_map.get(appointment.locator)
+    assert appointment.locator not in [tracker.get("locator") for tracker in watcher.responder.trackers.values()]
+
+
 def test_add_too_many_appointments(watcher):
     # Simulate the user is registered
     user_sk, user_pk = generate_keypair()
@@ -246,9 +553,37 @@ def test_do_watch(watcher, temp_db_manager):
     # FIXME: We should also add cases where the transactions are invalid. bitcoind_mock needs to be extended for this.
 
 
+def test_do_watch_cache_update(watcher):
+    # Test that data is properly added/remove to/from the cache
+
+    for _ in range(10):
+        blocks_in_cache = watcher.locator_cache.blocks
+        oldest_block_hash = list(blocks_in_cache.keys())[0]
+        oldest_block_data = blocks_in_cache.get(oldest_block_hash)
+        rest_of_blocks = list(blocks_in_cache.keys())[1:]
+        assert len(watcher.locator_cache.blocks) == watcher.locator_cache.cache_size
+
+        generate_blocks_w_delay(1)
+
+        # The last oldest block is gone but the rest remain
+        assert oldest_block_hash not in watcher.locator_cache.blocks
+        assert set(rest_of_blocks).issubset(watcher.locator_cache.blocks.keys())
+
+        # The locators of the oldest block are gone but the rest remain
+        for locator in oldest_block_data:
+            assert locator not in watcher.locator_cache.cache
+        for block_hash in rest_of_blocks:
+            for locator in watcher.locator_cache.blocks[block_hash]:
+                assert locator in watcher.locator_cache.cache
+
+        # The size of the cache is the same
+        assert len(watcher.locator_cache.blocks) == watcher.locator_cache.cache_size
+
+
 def test_get_breaches(watcher, txids, locator_uuid_map):
     watcher.locator_uuid_map = locator_uuid_map
-    potential_breaches = watcher.get_breaches(txids)
+    locators_txid_map = {compute_locator(txid): txid for txid in txids}
+    potential_breaches = watcher.get_breaches(locators_txid_map)
 
     # All the txids must breach
     assert locator_uuid_map.keys() == potential_breaches.keys()
@@ -258,38 +593,50 @@ def test_get_breaches_random_data(watcher, locator_uuid_map):
     # The likelihood of finding a potential breach with random data should be negligible
     watcher.locator_uuid_map = locator_uuid_map
     txids = [get_random_value_hex(32) for _ in range(TEST_SET_SIZE)]
+    locators_txid_map = {compute_locator(txid): txid for txid in txids}
 
-    potential_breaches = watcher.get_breaches(txids)
+    potential_breaches = watcher.get_breaches(locators_txid_map)
 
     # None of the txids should breach
     assert len(potential_breaches) == 0
 
 
-def test_filter_breaches_random_data(watcher):
-    appointments = {}
-    locator_uuid_map = {}
-    breaches = {}
+def test_check_breach(watcher):
+    # A breach will be flagged as valid only if the encrypted blob can be properly decrypted and the resulting data
+    # matches a transaction format.
+    uuid = uuid4().hex
+    appointment, dispute_tx = generate_dummy_appointment()
+    dispute_txid = watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
 
-    for i in range(TEST_SET_SIZE):
-        dummy_appointment, _ = generate_dummy_appointment()
-        uuid = uuid4().hex
-        appointments[uuid] = {"locator": dummy_appointment.locator, "user_id": dummy_appointment.user_id}
-        watcher.db_manager.store_watcher_appointment(uuid, dummy_appointment.to_dict())
-        watcher.db_manager.create_append_locator_map(dummy_appointment.locator, uuid)
+    penalty_txid, penalty_rawtx = watcher.check_breach(uuid, appointment, dispute_txid)
+    assert Cryptographer.encrypt(penalty_rawtx, dispute_txid) == appointment.encrypted_blob
 
-        locator_uuid_map[dummy_appointment.locator] = [uuid]
 
-        if i % 2:
-            dispute_txid = get_random_value_hex(32)
-            breaches[dummy_appointment.locator] = dispute_txid
+def test_check_breach_random_data(watcher):
+    # If a breach triggers an appointment with random data as encrypted blob, the check should fail.
+    uuid = uuid4().hex
+    appointment, dispute_tx = generate_dummy_appointment()
+    dispute_txid = watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
 
-    watcher.locator_uuid_map = locator_uuid_map
-    watcher.appointments = appointments
+    # Set the blob to something "random"
+    appointment.encrypted_blob = get_random_value_hex(200)
 
-    valid_breaches, invalid_breaches = watcher.filter_breaches(breaches)
+    with pytest.raises(EncryptionError):
+        watcher.check_breach(uuid, appointment, dispute_txid)
 
-    # We have "triggered" TEST_SET_SIZE/2 breaches, all of them invalid.
-    assert len(valid_breaches) == 0 and len(invalid_breaches) == TEST_SET_SIZE / 2
+
+def test_check_breach_invalid_transaction(watcher):
+    # If the breach triggers an appointment with data that can be decrypted but does not match a transaction, it should
+    # fail
+    uuid = uuid4().hex
+    appointment, dispute_tx = generate_dummy_appointment()
+    dispute_txid = watcher.block_processor.decode_raw_transaction(dispute_tx).get("txid")
+
+    # Set the blob to something "random"
+    appointment.encrypted_blob = Cryptographer.encrypt(get_random_value_hex(200), dispute_txid)
+
+    with pytest.raises(InvalidTransactionFormat):
+        watcher.check_breach(uuid, appointment, dispute_txid)
 
 
 def test_filter_valid_breaches(watcher):
@@ -323,3 +670,30 @@ def test_filter_valid_breaches(watcher):
 
     # We have "triggered" a single breach and it was valid.
     assert len(invalid_breaches) == 0 and len(valid_breaches) == 1
+
+
+def test_filter_breaches_random_data(watcher):
+    appointments = {}
+    locator_uuid_map = {}
+    breaches = {}
+
+    for i in range(TEST_SET_SIZE):
+        dummy_appointment, _ = generate_dummy_appointment()
+        uuid = uuid4().hex
+        appointments[uuid] = {"locator": dummy_appointment.locator, "user_id": dummy_appointment.user_id}
+        watcher.db_manager.store_watcher_appointment(uuid, dummy_appointment.to_dict())
+        watcher.db_manager.create_append_locator_map(dummy_appointment.locator, uuid)
+
+        locator_uuid_map[dummy_appointment.locator] = [uuid]
+
+        if i % 2:
+            dispute_txid = get_random_value_hex(32)
+            breaches[dummy_appointment.locator] = dispute_txid
+
+    watcher.locator_uuid_map = locator_uuid_map
+    watcher.appointments = appointments
+
+    valid_breaches, invalid_breaches = watcher.filter_breaches(breaches)
+
+    # We have "triggered" TEST_SET_SIZE/2 breaches, all of them invalid.
+    assert len(valid_breaches) == 0 and len(invalid_breaches) == TEST_SET_SIZE / 2
diff --git a/watchtower-plugin/net/http.py b/watchtower-plugin/net/http.py
index ea31833..aff661c 100644
--- a/watchtower-plugin/net/http.py
+++ b/watchtower-plugin/net/http.py
@@ -18,6 +18,7 @@ def add_appointment(plugin, tower_id, tower, appointment_dict, signature):
         response = send_appointment(tower_id, tower, appointment_dict, signature)
         plugin.log(f"Appointment accepted and signed by {tower_id}")
         plugin.log(f"Remaining slots: {response.get('available_slots')}")
+        plugin.log(f"Start block: {response.get('start_block')}")
 
         # # TODO: Not storing the whole appointments for now. The node can recreate all the data if needed.
         # # DISCUSS: It may be worth checking that the available slots match instead of blindly trusting.