Integration of Blockchain and IoT (BIoT): Applications, Security Issues, and Challenges

Integration of Blockchain and IoT (BIoT): Applications, Security Issues, and Challenges

Sushma Malik, Anamika Rana
DOI: 10.4018/978-1-6684-3733-9.ch001
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The internet of technology (IoT) refers to the connectivity of smart devices with the internet to accumulate data and transfer it to smart devices. But with the lack of built-in security measures, IoT is vulnerable to privacy and security threats. Blockchain technology assists in the security needs of IoT devices. The main characteristics of blockchain technology like immutability, transparency, auditability, and encryption of data sort out the inadequacy of IoT devices. This chapter represents an inclusive survey on blockchain and IoT technologies with the integration of these technologies to overcome the shortfall. This chapter includes an overview of both technologies with their advantages and disadvantages. It also highlights the domains of their applications and represents the advantages of integration of blockchain and IoT technology to develop BIoT (blockchain-based IoT). Also, it analyzes the main challenges faced during the smooth integration of blockchain and IoT technologies.
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Blockchain has a list of records which is called blocks. All the blocks are linked by using cryptographic techniques (Alphonse & Starvin, 2020). Blockchain can be defined as a transparent, trusted, and decentralized ledger on a peer-to-peer network and it is a virtual Bitcoin cryptocurrency invented by Satoshi Nakamoto in 2008. The transaction is the data unit on the Blockchain and certain numbers of transactions are bundled in a Block (N. Kumar & Aggarwal, 2020). The cryptographic hash value is calculated and placed in its next block along with the timestamp. Blockchain is a distributed and open ledger that records transactions very efficiently. The alteration of data in the blockchain is restricted (Bach et al., 2018). For all the participant's blockchain ledger is available to access but still not regulated by any network authorities and this can be possible by imposing strict rules and mutual agreement between the network nodes (Uddin et al., 2021). Each block in the blockchain has contained the hash value that stores the hash value of the previous block. Hash is a unique address of each block assigned during its creation and any modification in the block will lead to a change in its hash value. The root hash value for all the transactions is stored. The timestamp is stored as the creation time of the block and the Nonce value is ensuring that the present hash value is below the target shown in Figure 1.

Figure 1.

Structure of blocks


Blockchain is the chain of blocks that enclose information. Digital documents are not possible to backdate or temper them because of this technology and double records problem are also sorted out since a central server is not required. Blockchain technology is used to transfer the items like money, property, contracts, and many more in a secure manner without the involvement of third parties like banks or the government. Data stored in blockchain are very hard to modify.

Blockchain is simply the correlation of three different technologies (Sharma et al., 2020):

  • 1.


  • 2.

    Private key cryptography and

  • 3.

    Protocol governing incentivization

This technology is distributed, decentralized, shared and immutable means stored data cannot be modified or wiped out from the database ledger were stored all the transaction records and the hash value of the previous block and also provide the global trust. Elliptic curve cryptography (ECC) and SHA 256 hashing algorithms are used to provide security by data authentication and integrity. Blockchain is a software protocol like SMTP which is used for email over the internet that’s why blockchain cannot be run without the internet (Thompson, 2021).

Sometimes blockchain is replaced with bitcoin word but in reality, bitcoin is not the blockchain technology instead, blockchain technology is behind the bitcoin. Bitcoin is the digital token and blockchain is acts as the ledger used to store the information of bitcoins. Blockchain can be existing without bitcoin but the existence of bitcoin can be depending on the blockchain.

Working of Blockchain

A new block is created for any new record or transaction within the blockchain. After that created block is shared with each node of the block to verify the genuineness of the block. And after verifying the validity of the block, it is added at the end of the blockchain and it represents the completion of a transaction (Lastovetska, 2021). Figure 2 shows the working of blockchain.

Figure 2.

Working of blocks


Key Terms in this Chapter

Protocol: A protocol is a set of rules for formatting and processing data in networking. Computer protocols are similar to a common language. Although the software and hardware used by the computers in a network may differ greatly, protocols allow them to communicate with one another.

Blockchain: A blockchain is a distributed database that is shared across nodes in a computer network. A blockchain is a database that stores data in a digital manner. Blockchains are well-known for their role in maintaining a secure and decentralized record of transactions in cryptocurrency systems such as Bitcoin. The blockchain's unique feature is that it maintains data record integrity and security while also building confidence without the need for a trusted third party.

Big Data: Big data is a vast collection of information that continues to grow exponentially over time. It's a data set that's so large and complex that traditional data management tools can't store or analyze it efficiently. The difference between big data and regular data is that big data is substantially greater.

Sensors: A sensor is a device that detects physical input from its surroundings and transforms this into facts that can be evaluated by humans or machines.

Cryptocurrency: Any sort of digital or virtual currency that uses encryption to secure transactions is referred to as cryptocurrency. Cryptocurrencies work without a central authority issuing or controlling them, instead relying on a decentralised system to track transactions and create new units.

Internet of Things (IoT): The internet of things, or IoT, is a network of networked computers devices, mechanical and digital machinery, goods, animals, and people with unique identifiers (UIDs) and the ability to transfer data without human or computer contact.

Peer-to-peer Network: A peer-to-peer (P2P) network is a decentralised communication architecture in which two peers, referred to as nodes, can communicate with each other without the use of a central server.

Ledger: A ledger is a sort of record that is shared, copied, and synchronized across decentralised network members. The distributed ledger keeps track of transactions between network participants, such as the exchange of assets or data.

Bitcoin: Bitcoin is a cryptocurrency or virtual currency, that is supposed to operate as money and a form of payment while being independent of any single person, group, or entity, obviating the need for third-party involvement in financial transactions.

Cloud: The phrase “cloud” refers to servers that are accessible over the Internet, as well as the software and databases that run on them. Many data centers throughout the world host cloud servers.

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