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he block generation process
provides a novel, distributed-trustless-consensus mechanism. It is
very computationally expensive for a malicious attacker to modify
a block and corrupt the block chain since the rest of the trusted
miners would outrun the attacker in the block generation process
and therefore the trusted branch of blocks will invalidate the one
generated by the attacker. In technical terms, in order for a ma-
nipulated block to be successfully added to the chain, it would be
necessary to solve | [
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] | On blockchain and its integration with IoT Challe | 1,672 |
the proof of work faster than the rest of the net-
work, which is computationally too expensive — it requires having
control of at least 51% of the computing resources in the network.
Due to the large computational capacity needed to modify the
blockchain, the corruption of its blocks is practically impossible.
This means that, even if the participants are not completely honest
about the use of Bitcoin, a consensus is always reached in the
network as long asmost of the network is formed by honest partic- | [
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] | On blockchain and its integration with IoT Challe | 1,673 |
the proof of work faster than the rest of the net-
work, which is computationally too expensive — it requires having
control of at least 51% of the computing resources in the network.
Due to the large computational capacity needed to modify the
blockchain, the corruption of its blocks is practically impossible.
This means that, even if the participants are not completely honest
about the use of Bitcoin, a consensus is always reached in the
network as long asmost of the network is formed by honest partic- | [
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] | On blockchain and its integration with IoT Challe | 1,674 |
ipants. The solution proposed by Nakamoto was a great revolution
in the reliability of unreliable actors in decentralized systems.More
details about the blockchain architecture can be found in [5,7].
Blockchain has also provided a technology where the concept
of smart contract can be materialized. In general terms, a smart
contract refers to the computer protocols or programs that allow a
contract to be automatically executed/enforced taking into account
a set of predefined conditions. For example, smar | [
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] | On blockchain and its integration with IoT Challe | 1,675 |
t contracts define
the application logic that will be executed whenever a transaction
takes place in the exchange of cryptocurrency. In smart contracts,
functions and conditions can be defined beyond the exchange
of cryptocurrencies, such as the validation of assets in a certain
range of transactions with non-monetary elements, which makes
it a perfect component to expand blockchain technology to other
areas. Ethereum [8] was one of the pioneer blockchains to in-
clude smart contracts. Today smart contrac | [
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] | On blockchain and its integration with IoT Challe | 1,676 |
ts have been included
in the majority of existing blockchain implementations, such as
Hyperledger [9], a blockchain designed for companies that allows
components to be deployed according to the needs of users (smart
contracts, services or consultations among others) with the sup-
port of large companies such as IBM, JP Morgan, Intel and BBVA.
All of this has contributed to the expansion of blockchain tech-
nology to a large number of areaswhere the features offered by this
technology are needed: reliabil | [
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] | On blockchain and its integration with IoT Challe | 1,677 |
ts have been included
in the majority of existing blockchain implementations, such as
Hyperledger [9], a blockchain designed for companies that allows
components to be deployed according to the needs of users (smart
contracts, services or consultations among others) with the sup-
port of large companies such as IBM, JP Morgan, Intel and BBVA.
All of this has contributed to the expansion of blockchain tech-
nology to a large number of areaswhere the features offered by this
technology are needed: reliabil | [
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] | On blockchain and its integration with IoT Challe | 1,678 |
ity, immutability and auditability.
In fact, blockchain is currently one of the top research topics of re-
cent times, with more than 1.4 billion dollars invested by startups
alone in the first 9 months of 2016 according to PwC [10].
2.1. Challenges
Although the key idea of blockchain is simple, its implementa-
tion poses a great number of challenges. This section introduces
the main ones that its use brings about.
2.1.1. Storage capacity and scalability
Storage capacity and scalability have been deepl | [
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] | On blockchain and its integration with IoT Challe | 1,679 |
ity, immutability and auditability.
In fact, blockchain is currently one of the top research topics of re-
cent times, with more than 1.4 billion dollars invested by startups
alone in the first 9 months of 2016 according to PwC [10].
2.1. Challenges
Although the key idea of blockchain is simple, its implementa-
tion poses a great number of challenges. This section introduces
the main ones that its use brings about.
2.1.1. Storage capacity and scalability
Storage capacity and scalability have been deepl | [
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] | On blockchain and its integration with IoT Challe | 1,680 |
y questioned
in blockchain. In this technology, the chain is always growing, at a
rate of 1MB per block every 10 min in Bitcoin, and there are copies
stored among nodes in the network. Although only full nodes (a
node that can fully validate transactions and blocks) store the
full chain, storage requirements are significant. As the size grows,
nodes require more and more resources, thus reducing the sys-
tem's capacity scale. In addition, an oversized chain has negative
effects on performance, for instan | [
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] | On blockchain and its integration with IoT Challe | 1,681 |
y questioned
in blockchain. In this technology, the chain is always growing, at a
rate of 1MB per block every 10 min in Bitcoin, and there are copies
stored among nodes in the network. Although only full nodes (a
node that can fully validate transactions and blocks) store the
full chain, storage requirements are significant. As the size grows,
nodes require more and more resources, thus reducing the sys-
tem's capacity scale. In addition, an oversized chain has negative
effects on performance, for instan | [
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] | On blockchain and its integration with IoT Challe | 1,682 |
ce, it increases synchronization
time for new users.
Transaction validation is a key component of the distributed
consensus protocol as nodes in the blockchain network are ex-
pected to validate each transaction of each block. The number of
transactions in a block and the time between blocks, modulate
the computational power required and this has a direct effect on
transaction confirmation times. Hence, the consensus protocol has
a direct effect on the scalability of blockchain networks.
Taking into acc | [
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] | On blockchain and its integration with IoT Challe | 1,683 |
ce, it increases synchronization
time for new users.
Transaction validation is a key component of the distributed
consensus protocol as nodes in the blockchain network are ex-
pected to validate each transaction of each block. The number of
transactions in a block and the time between blocks, modulate
the computational power required and this has a direct effect on
transaction confirmation times. Hence, the consensus protocol has
a direct effect on the scalability of blockchain networks.
Taking into acc | [
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] | On blockchain and its integration with IoT Challe | 1,684 |
ount the trust model of Bitcoin and its scal-
ability limitations, Bitcoin-NG [11] proposes a new Byzantine-
fault-tolerant blockchain protocol which improves the consensus
latency with respect to Bitcoin. Litecoin [12] is technically identi-
cal to Bitcoin, but features faster transaction confirmation times
and improved storage efficiency thanks to the reduction of the
block generation time and the proof of work, which is based on
scrypt, a memory intensive password-based key derivation func-
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"Per"
] | On blockchain and its integration with IoT Challe | 1,685 |
ount the trust model of Bitcoin and its scal-
ability limitations, Bitcoin-NG [11] proposes a new Byzantine-
fault-tolerant blockchain protocol which improves the consensus
latency with respect to Bitcoin. Litecoin [12] is technically identi-
cal to Bitcoin, but features faster transaction confirmation times
and improved storage efficiency thanks to the reduction of the
block generation time and the proof of work, which is based on
scrypt, a memory intensive password-based key derivation func-
tion. GHOST | [
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[13] is intended to improve the scalability of Bitcoin
by changing its chain selection rule. Off-chain solutions [14] are in-
tended to perform transactions off the chain, increasing the band-
width at the same time as it increases the probability of losing data.
Another proposal suggests reducing the propagation delay [15] in
the Bitcoin protocol, however it can compromise the security of
the network. Rather than increasing the scalability on blockchain,
BigchainDB [16] adds blockchain characteristics t | [
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"protocol"
] | On blockchain and its integration with IoT Challe | 1,687 |
[13] is intended to improve the scalability of Bitcoin
by changing its chain selection rule. Off-chain solutions [14] are in-
tended to perform transactions off the chain, increasing the band-
width at the same time as it increases the probability of losing data.
Another proposal suggests reducing the propagation delay [15] in
the Bitcoin protocol, however it can compromise the security of
the network. Rather than increasing the scalability on blockchain,
BigchainDB [16] adds blockchain characteristics t | [
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] | On blockchain and its integration with IoT Challe | 1,688 |
o a big data
distributed database. BigchainDB combines the high throughput
and low latency characteristics of big data distributed databases
with the immutability and decentralized system of blockchain.
Another important development is the Inter Planetary File System
(IPFS) [17]. IPFS is a protocol designed to store decentralized and
shared files enabling a P2P distributed file system to make the
web safer, faster and more open. IPFS is intended to increase the
efficiency of the web at the same time as it | [
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] | On blockchain and its integration with IoT Challe | 1,689 |
o a big data
distributed database. BigchainDB combines the high throughput
and low latency characteristics of big data distributed databases
with the immutability and decentralized system of blockchain.
Another important development is the Inter Planetary File System
(IPFS) [17]. IPFS is a protocol designed to store decentralized and
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] | On blockchain and its integration with IoT Challe | 1,690 |
removes duplication
and tracks version history for each file.
2.1.2. Security: weaknesses and threats
The Bitcoin protocol has been thoroughly analyzed [18], and
various vulnerabilities and security threats have been discovered.
The most common attack is the 51% attack or majority at-
tack [19].
This attack can occur if a blockchain participant is able to control
more than 51% of the mining power. In this situation he/she can
control the consensus in the network. The boom and fast evolution
of mining | [
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removes duplication
and tracks version history for each file.
2.1.2. Security: weaknesses and threats
The Bitcoin protocol has been thoroughly analyzed [18], and
various vulnerabilities and security threats have been discovered.
The most common attack is the 51% attack or majority at-
tack [19].
This attack can occur if a blockchain participant is able to control
more than 51% of the mining power. In this situation he/she can
control the consensus in the network. The boom and fast evolution
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pools (with GHash.io4 temporarily reaching 51% of the
Bitcoinmining power in 2014), has increased the probability of this
attack happening, which in turn could compromise the integrity
of Bitcoin. In addition, the authors in [20] discuss the possibility
of reaching a majority of mining power through bribery. The solo
mining incentive or P2P mining would help alleviate this problem.
Many other consensus mechanisms proposed for blockchains are
also susceptible tomajority attacks, especially those that cent | [
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] | On blockchain and its integration with IoT Challe | 1,693 |
pools (with GHash.io4 temporarily reaching 51% of the
Bitcoinmining power in 2014), has increased the probability of this
attack happening, which in turn could compromise the integrity
of Bitcoin. In addition, the authors in [20] discuss the possibility
of reaching a majority of mining power through bribery. The solo
mining incentive or P2P mining would help alleviate this problem.
Many other consensus mechanisms proposed for blockchains are
also susceptible tomajority attacks, especially those that cent | [
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] | On blockchain and its integration with IoT Challe | 1,694 |
ralize
the consensus among a limited number of users.
176 A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190
The double-spend attack consists in spending the same coin
twice [21]. In Bitcoin a transaction should be considered confirmed
only after the block where the transaction is stored has a certain
depth in the blockchain, typically 5 or 6. This takes between 20
and 40 min on average [22]. There is a large variance in the con-
firmation time since it depends on many factors. In | [
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",",
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"2",
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"##cha",
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"74",
"]",
",",
"Li",
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"12",
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"112",
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"##n",
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"113",
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"]",
",",
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"32",
"]",
",",
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",",
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"##y",
"[",
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"]",
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"[",
"115",
"]",
".",
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"##cha",
"##in",
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"trusted",
"distributed",
"ledge",
"##r",
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".",
"In",
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"-",
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"##no",
"##lo",
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"117",
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"[",
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"]",
"and",
"in",
"India",
"for",
"land",
"registration",
"[",
"119",
"]",
"."
] | On blockchain and its integration with IoT Challe | 1,695 |
ralize
the consensus among a limited number of users.
176 A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190
The double-spend attack consists in spending the same coin
twice [21]. In Bitcoin a transaction should be considered confirmed
only after the block where the transaction is stored has a certain
depth in the blockchain, typically 5 or 6. This takes between 20
and 40 min on average [22]. There is a large variance in the con-
firmation time since it depends on many factors. In | [
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] | On blockchain and its integration with IoT Challe | 1,696 |
fast payment
scenarios the trader cannot afford this wait. Therefore, in these
scenarios, double-spend attacks are still possible.
Similarly, race attacks can work in these scenarios. To carry out
this attack the user sends a transaction directly to the merchant,
who accepts the transaction too quickly. Then the user sends
multiple conflicting transactions to the network transferring the
coins of the payment to himself. The second transaction is more
likely to be confirmed, and the merchant is cheated. S | [
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] | On blockchain and its integration with IoT Challe | 1,697 |
fast payment
scenarios the trader cannot afford this wait. Therefore, in these
scenarios, double-spend attacks are still possible.
Similarly, race attacks can work in these scenarios. To carry out
this attack the user sends a transaction directly to the merchant,
who accepts the transaction too quickly. Then the user sends
multiple conflicting transactions to the network transferring the
coins of the payment to himself. The second transaction is more
likely to be confirmed, and the merchant is cheated. S | [
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imilarly, the
Finney [23] attack is a more sophisticated double spend, since it
requires the participation of a miner.
The well-known attacks Denial of Service(DoS), Man in the
Middle (MitM) or Sybil can also obstruct the network operation.
Most P2P protocols and IoT infrastructures are vulnerable to these
kinds of attacks, since they strongly rely on communications. In the
eclipse attack [24], attackers canmonopolize a node's connections,
isolating it from the rest of the network and altering the view o | [
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imilarly, the
Finney [23] attack is a more sophisticated double spend, since it
requires the participation of a miner.
The well-known attacks Denial of Service(DoS), Man in the
Middle (MitM) or Sybil can also obstruct the network operation.
Most P2P protocols and IoT infrastructures are vulnerable to these
kinds of attacks, since they strongly rely on communications. In the
eclipse attack [24], attackers canmonopolize a node's connections,
isolating it from the rest of the network and altering the view o | [
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] | On blockchain and its integration with IoT Challe | 1,700 |
f the
network for this node.
Code updates and optimization in blockchain networks are
usually supported by part of the cryptocurrency community and
are intended to improve their underlying protocols. These im-
provements are known as soft and hard forks in blockchain ter-
minology. On the one hand, soft forks provide an update of the
software protocol that recognizes backward-compatibility with
the previous blocks. This requires an upgrading of the majority of
the miners to the new software. However, upg | [
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f the
network for this node.
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usually supported by part of the cryptocurrency community and
are intended to improve their underlying protocols. These im-
provements are known as soft and hard forks in blockchain ter-
minology. On the one hand, soft forks provide an update of the
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raded functionality
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t sufficient consensus like
SegWit2x [25]. Noted examples of that division are Ethereum and
Ethereum Classic; and Bitcoin, Bitcoin Cash and Bitcoin Gold. The
aforementioned hard forks have progressed at the same time as
the original networks and nowadays they are competingwith each
other. Nodes and users have to decide on a version, and the fork
continuity will depend on these decisions. Hence forks, especially
hard ones, can divide the community into two completely different
blockchains and this can repr | [
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] | On blockchain and its integration with IoT Challe | 1,705 |
t sufficient consensus like
SegWit2x [25]. Noted examples of that division are Ethereum and
Ethereum Classic; and Bitcoin, Bitcoin Cash and Bitcoin Gold. The
aforementioned hard forks have progressed at the same time as
the original networks and nowadays they are competingwith each
other. Nodes and users have to decide on a version, and the fork
continuity will depend on these decisions. Hence forks, especially
hard ones, can divide the community into two completely different
blockchains and this can repr | [
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] | On blockchain and its integration with IoT Challe | 1,706 |
esent a risk to the blockchain users.
A common problem of virtual currencies, beyond the contro-
versy surrounding their real value, is the problem of coin loss. If
the wallet key is forgotten, there is no mechanism to operate with
these coins. It has been estimated that 30% of bitcoins are lost.
Finally, quantum computing could be seen as a threat to Bit-
coin, since the computing power of these computers could break
the security of digital signatures. Furthermore, technology pro-
gresses over time and | [
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] | On blockchain and its integration with IoT Challe | 1,707 |
every day new bugs and security breaches
are discovered. These improvements and bugs can compromise
public blockchains with encrypted data since blockchain data is
immutable.
2.1.3. Anonymity and data privacy
Privacy is not enforced in the Bitcoin protocol by design. A key
feature of Bitcoin is its transparency. In blockchain each transaction
can be checked, audited and traced from the system's very first
transaction. This is indeed an unheard of new level of transparency
that doubtlessly helps to buil | [
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] | On blockchain and its integration with IoT Challe | 1,708 |
every day new bugs and security breaches
are discovered. These improvements and bugs can compromise
public blockchains with encrypted data since blockchain data is
immutable.
2.1.3. Anonymity and data privacy
Privacy is not enforced in the Bitcoin protocol by design. A key
feature of Bitcoin is its transparency. In blockchain each transaction
can be checked, audited and traced from the system's very first
transaction. This is indeed an unheard of new level of transparency
that doubtlessly helps to buil | [
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d trust. However this transparency
has a knock-on effect on privacy, even though there is no direct re-
lationship betweenwallets and individuals, user anonymity seems
to be compromised despite the mechanisms that Bitcoin provides,
such as pseudonymous and the use of multiple wallets. In this
sense, some effort has been made to provide stronger anonymity
features in Bitcoin. On the other hand not just open virtual curren-
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level of privacy in the chain, specifically those that
deal with sensitive data.
Popular attempts to tackle the anonymity problem in Bitcoin
are Zerocash [26] and Zerocoin [27] which propose that Bitcoin
extensions have completely anonymous transactions, hiding the
sender, the receiver and the information itself. Monero [28] uses
a ring of signatures to make transactions untraceable, so that they
cannot be easily traced back to any given person or computer.
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] | On blockchain and its integration with IoT Challe | 1,712 |
lers, provided by
Bitcoin Fog [29] and Bit Laundry can increase the anonymity. These
services break up transactions into smaller payments and schedule
them to obfuscate transactions for a fee. However, these kinds of
services are said to be prone to theft. Likewise, the coin-mixing
approach, originally proposed in CoinJoin [30] helps to anonymize
Bitcoin. The idea is that users agree on joint payments, so that it can
no longer be assumed that transaction inputs are from the same
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] | On blockchain and its integration with IoT Challe | 1,713 |
us negotiation required between users,
typically performed by mixing servers, could lack the required
anonymity depending on the implementation. Later, this approach
inspired Dark Wallet [31], a browser plugin that allows com-
pletely private anonymous Bitcoin transactions; Dash [32], known
as the first cryptocurrency focused on anonymity and privacy;
MixCoin [33], that adds cryptographic accountability mechanisms
and randomized mixing fees to increase security; CoinShuffle [34]
that proposes a modificati | [
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us negotiation required between users,
typically performed by mixing servers, could lack the required
anonymity depending on the implementation. Later, this approach
inspired Dark Wallet [31], a browser plugin that allows com-
pletely private anonymous Bitcoin transactions; Dash [32], known
as the first cryptocurrency focused on anonymity and privacy;
MixCoin [33], that adds cryptographic accountability mechanisms
and randomized mixing fees to increase security; CoinShuffle [34]
that proposes a modificati | [
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on of CoinJoin in order to increase secu-
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based on the inclusion of intermediaries that receive coins and
make the payment with unconnected coins; and Blindcoin [36]
that increases the anonymity of themixing server. In general, these
attempts to increase anonymity in Bitcoin typically embrace the
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accused of encouraging illicit activities, such as the acquisition of
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] | On blockchain and its integration with IoT Challe | 1,716 |
oducts on the Darknet or money laundering.
In order to increase privacy, data in the blockchain can be
encrypted. Hawk [37] stores encrypted transactions. The Hawk
compiler is responsible for translating the generic code written
by programmers into cryptographic primitives that enable infor-
mation anonymity in transactions. The Enigma project [38], in
addition to encryption, splits data into unrecognizable chunks and
distributes them through the network, in a way that no node ever
has access to the data | [
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. It uses a decentralized off-chain distributed
hash-table (DHT) accessible through the blockchain to store data
references.
The problem of privacy in private blockchains can be tackled
differently, since by definition they must provide authentication
and authorization mechanisms. However, even inside a private
blockchain, participants want to preserve the privacy of their data.
Quorum [39] for instance, is a private permissioned blockchain
based on Ethereum that uses cryptography to limit the visibility | [
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] | On blockchain and its integration with IoT Challe | 1,719 |
h smart
contracts in Ethereum. Hyperledger Fabric [9] provides a dis-
tributed and scalable ledger focused on enterprise environments.
To provide blockchain networks with privacy control, Hyperledger
Fabric provides an identity control service and access control lists
A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190 177
through private channels where users can control and restrict the
access to their shared information in the network. Thanks to this
mechanism, members of the netw | [
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can verify data without relying on authorities, just by checking
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ell-knownDHT to store key–value pairs (user
identities and permissions) to access, control and storage data.
In [44] a pointer and a hash to validate the data obtained are
stored in the chain. In this way, the data in the chain are links
to the private data, and the hash is the mechanism that verifies
that the information obtained has not been altered. Access control
mechanisms for off-chain sources are provided to ensure that only
authorized parties can access the information. The information
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] | On blockchain and its integration with IoT Challe | 1,723 |
re be obtained from external sources in a secure and
verified way with blockchain.
2.1.4. Smart contracts
In 1993, Nick Szabo defined the smart contract as ''A computer-
ized transaction protocol that executes the terms of a contract''.
One of the key features of a smart contract is that it has a way
to enforce or self-execute contractual clauses. Until the emer-
gence of blockchain technology, this was technologically unviable.
Blockchain has turned out to be the ideal technology to support
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acts. In addition, smart contracts have contributed sig-
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contracts in a trusted environment without centralized control
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, they just send a transaction to this address. The
correct execution of the contract is enforced by the blockchain con-
sensus protocol. Smart contracts introduce a set of advantages such
as cost reduction, speed, precision, efficiency, and transparency
that have fostered the appearance of many new applications in
a wide variety of areas. Although Bitcoin offers a basic scripting
language, it has turned out to be insufficient, which has led to
the emergence of new blockchain platforms with integrated sma | [
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] | On blockchain and its integration with IoT Challe | 1,726 |
rt
contract functionality.
The most prominent smart contract blockchain platform is
Ethereum [8]. Ethereum is a blockchain with a built-in Turing-
complete programming language, that allows the definition of
smart contracts and decentralized applications. The code in
Ethereum's contracts is written in ''Ethereum virtual machine
code'', a low-level, stack-based bytecode language.
Frequently, financial smart contracts require access to data
about real-world states and events. This data is provided by the
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] | On blockchain and its integration with IoT Challe | 1,727 |
so-called oracles. These entities are crucial for the successful in-
tegration of smart contracts within the real world, but they also
create more complexity, since authentication, security and trust in
oracles have to be provided [45].
The advantages of smart contracts do not comewithout cost, as
they are vulnerable to a series of attacks [46–48] that bring new
exciting challenges. Delegating contract execution to computers
brings with it some problems, since it makes them vulnerable to
technical issue | [
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s such as hacking, bugs, viruses or communication
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to verify and guarantee the correct operation of smart contracts
are necessary for them to be widely and safety adopted by clients
and providers. The formal validation of the contract logic, and its
correctness are research areaswhere contributions are expected to
be made in the years to come [49].
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tracts usually have clauses or conditions
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to be done in order to model the conditions of the contracts in
smart contracts, so that they are representable and quantifiable for
a machine to execute them. Additionally, efforts to provide tools
for users to be able to specify and understand smart contracts are
needed [50].
2.1.5. Legal issues
The absence of a central authority, the non-existent minting
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rth of censorship in Bitcoin is
an attractive and at the same time dangerous peculiarity. Bitcoin
users are commonly accused of using the network for fraudulent
purposes, and thus the technology is suspected of promoting or
facilitating illegal conduct. Bitcoin, as the first decentralized cryp-
tocurrency has generated a lot of dispute [51]. On the one hand,
with regard to its value, some experts claim it is a fraud [52] and
that it will totally collapse [53], while at the same time others
estimate that i | [
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] | On blockchain and its integration with IoT Challe | 1,731 |
ts value will reach 100.000 dollars in 10 years [54].
The European Central Bank, has warned of its volatility risk but
have also admitted its potential as a financial innovation [55].
However, with regard to the lack of governance, many countries
are developing new laws in an attempt to regulate the use of virtual
currencies (a map of Bitcoin regulation status is available at [56]).
This situation creates a lot of uncertainty, and seems to be the
reason behind its recent fall [57].
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will have their say as to whether or not
the currency becomes legal tender. Legal implications in the con-
text of currencies is an important concern, as they can directly and
negatively affect blockchain applications based on that currency.
Many private and permissioned blockchain applications have
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] | On blockchain and its integration with IoT Challe | 1,733 |
very or transaction redemption, and can also contribute
to simplifying the problem of privacy and to reducing transaction
latency. In fact, interesting market opportunities have arisen in
insurance coverage for Bitcoins that would no longer be necessary
if the authorities handled this responsibility. The threat of mining
pools controlling the network, together with other vulnerabilities,
favors the development of such blockchains, and governments
are obviously interested in a regulated and controlled use | [
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of this
technology in many applications. However, this means that the
trustless networkwill regress to a third-party trust network, losing
part of its essence. In addition, this can potentially create bottle-
necks if solutions include centralized entities. The features of these
blockchains are closer to the features of distributed databases.
On the other hand, the key to increasing confidence in this
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consortiums of companies in their develo | [
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pment. Ongoing initia-
tives in this direction will be helpful [58,59]. Currently, personal
information is distributed among different entities: government,
universities, companies and so on. The information is spread across
many entities and accessing it is time consuming, even when
said entities answer to the same authority, e.g., the government.
This leads to obstacles in accessing information in addition to a
178 A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190
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] | On blockchain and its integration with IoT Challe | 1,737 |
pment. Ongoing initia-
tives in this direction will be helpful [58,59]. Currently, personal
information is distributed among different entities: government,
universities, companies and so on. The information is spread across
many entities and accessing it is time consuming, even when
said entities answer to the same authority, e.g., the government.
This leads to obstacles in accessing information in addition to a
178 A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190
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tworthy service that guarantees the information. A
trustworthy and global identity service with the information of
each personwould be disruptive at the present time. Nevertheless,
each country has its own laws and regulations.
Initiatives such as Alastria [60] aim to involve multiple entities
in the development of a national regulated blockchain, from public
notaries to universities and private companies. They plan to enable
a public and legal wallet for each person. Companies can also be
part of the ne | [
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tworthy service that guarantees the information. A
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Initiatives such as Alastria [60] aim to involve multiple entities
in the development of a national regulated blockchain, from public
notaries to universities and private companies. They plan to enable
a public and legal wallet for each person. Companies can also be
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] | On blockchain and its integration with IoT Challe | 1,740 |
twork. Therefore, each personal wallet could be a
digital proof of possessions, companies where he/she has worked,
college degrees and so on. This information could be used in a legal
and trustworthy way for many services. For instance, in the case of
a job interview, candidates could share their college degrees and
work experience information with the interviewers. This informa-
tion is reliable and verifiable by definition. These initiatives are
the key to expanding blockchain inside government institut | [
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twork. Therefore, each personal wallet could be a
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college degrees and so on. This information could be used in a legal
and trustworthy way for many services. For instance, in the case of
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work experience information with the interviewers. This informa-
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ions,
and the first step in creating a common and regulatory frame-
work for blockchain systems. Moreover, this could also facilitate
the administrative transactions of the population to obtain their
information, the data transfer between countries, the reduction of
corrupt information and a seamless integration between popula-
tion, companies, government and universities. However, this also
brings about an easy way to obtain highly private information, so
the privacy and security considered in the rest o | [
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ions,
and the first step in creating a common and regulatory frame-
work for blockchain systems. Moreover, this could also facilitate
the administrative transactions of the population to obtain their
information, the data transfer between countries, the reduction of
corrupt information and a seamless integration between popula-
tion, companies, government and universities. However, this also
brings about an easy way to obtain highly private information, so
the privacy and security considered in the rest o | [
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] | On blockchain and its integration with IoT Challe | 1,744 |
f the paper should
necessarily go hand in hand with these initiatives.
2.1.6. Consensus
Consensus mechanisms [61–63] are responsible for the in-
tegrity of the information contained in blockchain,while defending
against double-spend attacks, and therefore are an essential part
of blockchain technology. The final goal is to achieve consensus
in a distributed network without central authorities and with
participants who do not necessarily trust each other.
The consensus based on the proof of work (PoW), | [
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] | On blockchain and its integration with IoT Challe | 1,745 |
f the paper should
necessarily go hand in hand with these initiatives.
2.1.6. Consensus
Consensus mechanisms [61–63] are responsible for the in-
tegrity of the information contained in blockchain,while defending
against double-spend attacks, and therefore are an essential part
of blockchain technology. The final goal is to achieve consensus
in a distributed network without central authorities and with
participants who do not necessarily trust each other.
The consensus based on the proof of work (PoW), | [
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] | On blockchain and its integration with IoT Challe | 1,746 |
which
has worked so successfully in Bitcoin, forces miners to solve a
computationally-intensive easily-verifiable task in order to create
a new block. Once solved, the solution is published and the new
block is added to the chain. The new block is spread across the
network and the rest of the participants verify it and append it to
its local blockchain copy. This process can simultaneously occur in
different parts of the network. This is why the chain is in fact a
tree. There are several, valid branches e | [
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which
has worked so successfully in Bitcoin, forces miners to solve a
computationally-intensive easily-verifiable task in order to create
a new block. Once solved, the solution is published and the new
block is added to the chain. The new block is spread across the
network and the rest of the participants verify it and append it to
its local blockchain copy. This process can simultaneously occur in
different parts of the network. This is why the chain is in fact a
tree. There are several, valid branches e | [
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xisting simultaneously in
the blockchain network.When peers append a newblock, they also
have to check that the branch is the onewith themost accumulated
work (difficulty), that is, the longest chain which is assumed to
be the valid one. This allows consensus to be achieved quickly.
A key drawback is that PoW makes Bitcoin dependent on energy
consumption. The aforementioned 51% attack is a potential attack
on the Bitcoin protocol. Additionally, the incentives in PoW are
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be the valid one. This allows consensus to be achieved quickly.
A key drawback is that PoW makes Bitcoin dependent on energy
consumption. The aforementioned 51% attack is a potential attack
on the Bitcoin protocol. Additionally, the incentives in PoW are
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on as the proliferation ofmin-
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on as the proliferation ofmin-
ing pools confirm. This together with the mint reduction, reward
diminution and fee increase could compromise the system [64]
in the future. Certainly, PoW has certain drawbacks such as high
latency, low transaction rates and high energy expenditure that
makes it unsuitable for many applications. As stated, the latency,
or block frequency of 10 min may also be impractical in many
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Ethereum, DogeCoin and Mon-
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Not surprisingly many attempts to change PoW have recently
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security properties in the same way as PoW. The most popular
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Proof of
Stake (PoS). It is based on the fact that those users who own
more coins, are more interested in the survival and the correct
functioning of the system, and therefore are the most suitable to
carry the responsibility of protecting the system. Basically, the idea
behind using PoS is tomove the opportunity costs from outside the
system to inside the system. The algorithm randomly determines
the user responsible for the creation of each block, based on the
number of coins he/she owns. A common cri | [
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them in blocks. The election is performed by
voting, and each time a witness successfully produces a block it is
rewarded. This approach allows delegates to set the block latency,
block size and confirm transactions in just a second.
The Leased Proof of Stake (LPoS) allows users to lease funds
to other nodes, so that they are more likely to be selected for
block creation, increasing the number of electable participants, and
therefore reducing the probability of the network being controlled
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] | On blockchain and its integration with IoT Challe | 1,756 |
roup of nodes. Rewards are proportionally shared.
The Proof of Burn (PoB) [67] proposes burning coins, that is,
sending them to a verifiable unspendable address, in order to
publish a new block. Like PoW, PoB, is hard to do and easy to verify,
but in contrast requires no energy consumption. In addition, PoB
has some economic implications that contribute to a more stable
ecosystem.
Nem's [68] approach to consensus, called Proof of Importance
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s
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the number of transactions performed. In other words, productive
network activity is also rewarded, not just the amount, promoting
the useful behavior of the users.
Other extended variants are the activity test (PoA), a hybrid ap-
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] | On blockchain and its integration with IoT Challe | 1,758 |
that uses a random choice of manager to
mine each block based on runtimes within reliable execution en-
vironments. The Proof of Capacity (PoC) [69], also known as proof
of storage or space, uses available hard drive space instead of com-
puting resources. This approach is used in Permacoin, SpaceMint
and Burstcoin.
Private blockchains have specific features, since the number
of participants is usually lower than public blockchains and are
semi-reliable. They are usually registered in the system with a
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which is defined as a distributed blocking service. These ap-
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] | On blockchain and its integration with IoT Challe | 1,761 |
AFT [72]which separates key elements of consensus such
as choice of leaders, record replication and security, and forces
a greater degree of consistency to reduce the number of states
that need to be considered. The Practical Byzantine Fault Tolerance
(PBFT) algorithm, which is based on state machine replication
and replicate voting for consensus on state change, is used in
Hyperledger and Multichain. SIEVE [73], treats the blockchain as a
black box, executing operations and comparing the output of each
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AFT [72]which separates key elements of consensus such
as choice of leaders, record replication and security, and forces
a greater degree of consistency to reduce the number of states
that need to be considered. The Practical Byzantine Fault Tolerance
(PBFT) algorithm, which is based on state machine replication
and replicate voting for consensus on state change, is used in
Hyperledger and Multichain. SIEVE [73], treats the blockchain as a
black box, executing operations and comparing the output of each
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eplica. If there are divergences between the replicas, the operation
A. Reyna et al. / Future Generation Computer Systems 88 (2018) 173–190 179
is not validated. Another variant of the PBFT is the Byzantine
agreement Federated Byzantine Agreement (FBA). In FBA each par-
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participants to agree on a transaction before being considered
liquidated. It is used in Ripple [74]. Stellar [75] is another variant
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ial quorum concept. The quorum
is a set of nodes, enough to reach an agreement, the partial quorum
is a subset of a quorum with the ability to convince another given
node about the agreement. HDAC [76] is a system, currently being
implemented, which proposes an IoT Contract & M2M Transaction
Platform based on Multichain. HDAC is specially tailored to IoT
environments. It uses the ePow consensus algorithm whose main
goals are to motivate the participation of multiple mining nodes
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node about the agreement. HDAC [76] is a system, currently being
implemented, which proposes an IoT Contract & M2M Transaction
Platform based on Multichain. HDAC is specially tailored to IoT
environments. It uses the ePow consensus algorithm whose main
goals are to motivate the participation of multiple mining nodes
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nergy waste.
Finally, the HC Consensus, proposed in Hydrachain, is based on
a list of validators of which no more than one-third are unreliable.
To sum up, consensus mechanisms in public blockchains have
been widely proposed but poorly, formally proved. It is mandatory
to understand the guarantees they offer and their vulnerabilities
prior to using them [77]. In this sense, the research community
together with the industry have to work towards the validation
of these mechanisms in order to demonstrate t | [
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heir legitimacy. To
the contrary, private blockchains have adopted formalwell-known
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also limit the diversity and potential of applications.
3. IoT and blockchain integration
The IoT is transforming and optimizing manual processes to
make them part of the digital era, obtaining volumes of data
that provides knowledge at unheard of levels. This knowledge
is facilitating the development of smart applications such as the
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] | On blockchain and its integration with IoT Challe | 1,769 |
However, one of the most important vulnerabilities of
these initiatives, as has occurred in many scenarios, is the lack of
confidence. Centralized architectures like the one used in cloud
computing have significantly contributed to the development of
IoT. However, regarding data transparency they act as black boxes
and network participants do not have a clear vision of where and
how the information they provide is going to be used.
The integration of promising technologies like IoT and cloud
computing ha | [
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] | On blockchain and its integration with IoT Challe | 1,770 |
s proven to be invaluable. Likewise, we acknowl-
edge the huge potential of blockchain in revolutionizing the IoT.
Blockchain can enrich the IoT by providing a trusted sharing ser-
vice, where information is reliable and can be traceable. Data
sources can be identified at any time and data remains immutable
over time, increasing its security. In the cases where the IoT in-
formation should be securely shared between many participants
this integration would represent a key revolution. For instance, an
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] | On blockchain and its integration with IoT Challe | 1,771 |
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