![Introduction to Blockchain and IoT 3
the purpose of the blockchain were to solve two major problems. The first is to solve
the double spending problem and second was to eliminate the need of central trusted
third party.
2 Technical Aspects of Blockchain Technology
The blockchain is a chain of blocks that contain information. Originally, this tech-
nique was introduced in 1991 by the group of researchers and was originally meant
for digital documents timestamp so it is not possible to backdate the documents or
to tamper them. However, it was not in proper use until it was used and adapted by
Satoshi Nakamoto in the year 2009 in order to create a digital cryptocurrency bitcoin
[1].
2.1 Concept and Working of a Blockchain
The blockchain is a collection of blocks, which is totally open and public to everyone.
The open ledger in the blockchain is distributed in nature. The important feature of
blockchain is that once the data is recorded into the ledger, then that data can’t be
erased. How does the blockchain work? Every block present in the chain consists
of the data, hash to that particular data and the previous hash. The data recorded in
the blockchain depends on the type of the blockchain. If the blockchain is related
to bitcoins, it will store data for transactions, the information about the sender and
receiver and the number of bitcoins present in the network. Each block in the chain is
having a hash value that can be compared with the fingerprints. As the new block is
created, the hash of that particular block will also be generated. The hash of the block
will be changed with the modifications made in the block. Therefore, the hash value
is a very important factor while making modifications in the block. If the hash value
of any block will be changed, then it will not be considered to be in the same block.
Other than the hash of the current block, the block also holds the hash of the previous
block. This helps to make a chain by linking the current block to the previous block.
These features of a block in the chain makes blockchain more secure.
Consider an example of a chain having three blocks. As shown in Fig. 1, every
block consists of the hash value of the current block and the previous block. In the
figure the block number 2 is pointing toward the block number 1, block number 3 is
connected to block number 2 using the previous hash. The previous hash of the first
block is 0000 because it a special block which is not pointing back to any block. This
block is known as the Genesis block. Now suppose somebody wants to tamper block
number 2. With the tampering of the block, the hash value of that block will also be
changed. In that case, the third block and the following blocks connected in the chain
will stand invalid because there is no valid hash present at that moment. Therefore,
changing one block in the chain will result in invalidating all the following blocks](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-17-320.jpg)
![4 P. Rathee
Hash: 1P5F Hash: 2Q6R Hash: 3D2L
Previous hash: 1P5F Previous hash: 2Q6R
Previous hash: 0000
1 2 3
Genesis block
Fig. 1 Blockchain structure
in the chain. In order to make it valid, the hacker needs to change the hash value of
all the following blocks. Though it a good idea to make the blockchain secure it is
not sufficient to stop tampering. With the advancement in computer technologies,
hundreds or thousands of hash values can be calculated per second. Anyone can
change the hash of the current block and the following hash using the computational
technologies. In that case, those blocks will be valid even after tempering. Therefore,
in order to make it less serious, the blockchain introduces a concept known as proof
of work.
Using the technique of proof of work, the creation of the new block gets slow down
up to some extent. In this case of bitcoin, the calculation of proof of work requires
nearly 10 min in order to add the new block in the chain. This technique enhanced
the security in the blockchain. Because if someone will try to tamper with any block
in the chain then he has to recalculate the proof of work for all the following blocks
which are quite difficult. Therefore, the collective use of hashing technique and the
proof of work mechanism make the blockchain more secure.
One of the major advantages of blockchain is its distributed nature, which makes
blockchain secure themselves. Rather than the centralized system of managing the
chain, blockchain uses peer-to-peer network. As the blockchain is open and public,
anyone can join the network. After joining the network, the participant will be get-
ting the complete copy of the chain. The node can verify using that copy whether
everything is happening in order or not. Now if somebody creates a new block, then
what happens? The block will be sent to everyone present in the network. Each node
will verify that block in order to ensure that the block is genuine or tempered. After
verification, the new block that is created recently and verified will be added by each
node in their copy of the chain. Then an agreement is created by all the nodes in the
network. They make a consensus on which block is valid and which is not. If the
block is valid, it will be added in the chain. If the block is tempered with, then it will
be rejected by all the nodes. Therefore, in order to temper with one block, one has to
temper with all the blocks present in the chain, recalculate the has and the proof of
work for all the blocks. After doing that, only the tempered block will be accepted by
others present in the network, which is nearly impossible to perform. That is why the
combination of hash and proof of work is quite a secure mechanism for blockchain
[2].
The blockchains are evolving day by day. The smart contracts are the most recent
development of the blockchain. The smart contacts are used to transfer coins among](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-18-320.jpg)
![Introduction to Blockchain and IoT 7
2.3 Distributed Power
The Blockchain is nothing but a group of blocks or a chain of blocks. Each block is
going to contain some data and in the context of the blockchain, that data is a ledger
or a transaction. Let’s say at time T = 0 is the time when the first block was added to
the blockchain system and this block which was added at T = 0 is called the Genesis
block. Each block of the blockchain also linked to other blocks via linkages to the
previous blocks. So in other words, each block of the blockchain has a reference to its
previous block. This is how each block of the blockchain is connected to each other.
One of the major architectural aspects of blockchain is that blocks are distributed
across the P2P network. The P2P is a network wherein each node of the network is
connected to every other node of the network. These are the nodes, which also help to
store the blocks as well as to do some mining process on the blocks as per the criteria
which are mentioned in the blockchain algorithm. This arrangement with which the
blocks and the ledgers are distributed across the various nodes of the network is also
called as distributed ledger technology or DLT. The DLT is also abbreviated as an
alternative name of blockchain in order to make it more generic.
2.4 Security
The blockchain is one of the most fundamental technologies underpinning. One area
where the number of people getting excited to use blockchain is identity. Identity is a
very important concept at the basis of any security puzzle because if you know who
you are talking to, where they are coming from, then you can trust them. Blockchain
with its replicated storage and its decentralized management offers some exciting
possibilities for storing and providing access to identities which can then be used in
bigger transactions [3].
2.5 Transparency
One of the core philosophies of blockchain is transparency or visibility. So there is
open ledger for all to see what happened. Deterrence is a useful way of stopping
bad things from happening. If people know that the record of what they are doing is
going to be laid bare to be checked later to be verified, they often just won’t do the
bad things in the first place. It is not worth if the risk of getting caught is too high. So
in principle, this openness and transparency is a great way of taking out some of the
security problems and some requirements from technology from blockchain-based
systems.](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-21-320.jpg)
![10 P. Rathee
areas. The combination of IoT and blockchain seems to be a very efficient technology
in every field. Blockchain networks could provide a robust and decentralized system
for handling these issues on the micro level of individual devices and machines.
The internet of things going to need micropayments systems where devices can pay
automatically on demand based on the resources they consumed [4].
3.3 Social Implication of Blockchain and IoT
There are various social implications of blockchain and IoT. Some of them are
illustrated as follows:
Personal responsibility: It puts the responsibility of an individual solely in their
hands. You can no longer offload responsibility if you live in a completely open
environment. If you lose your private key, your money is gone.
Spreading of value distribution: One is also spreading the value of distribution if
one takes note of a few hacks in exchange. The system can’t be broken. The whole
things can’t be taken down by taking a single part of it. Only can be done is the value
distribution existing in the network. All of the data or value is held at the end nodes.
Service in transit: People who try to build on top of the network focus on actually
providing service through transit. The money is transmitting, and never held by one
node. The data is transformed and moved it somewhere else.
Large-scale agreement of information: As opposed to the client–server model, data
on one application may doesn’t correspond to the same redundant data on another
application. So when you have things like a consortium of banks, you have to have
a lot of middlemen which have to keep track of a lot of auditing. The blockchain
solves this problem in order to make the payment and money transfer system by
making it completely automated. As the blockchain technology is decentralized, so
the problem of the middleman is also got solve by using blockchain. And apart from
it, the IoT provides the interconnection of all the devices and blockchain provides
the decentralized property. Therefore, the combination of two makes it convenient
for the agreement of information on a large scale.
4 Blockchain Use Cases for IoT
4.1 Healthcare Industry
This section will illustrate how emerging technologies can be leveraged by the health-
care industry to capture, manage, and analyze patient details. The data sent by the
patient is recorded and presented to the doctors through IoT application. The doctor
can record the patient’s medical history and store it in a blockchain. Thereby pro-
viding immutability to the patient’s medical record. In the end states, doctors will](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-24-320.jpg)
![Introduction to Blockchain and IoT 13
companies don’t know about each other. As a consumer, you don’t know anything
about how, where, when, what, under what conditions your computer was made. This
is not just a problem for consumers. Today’s supply chain is so complex that even
Apple, Dell, or HP has difficulty in tracking that how their computers get made.
Smart contracts could make supply chain management simpler and more trans-
parent. The idea is to create a single source of information about products in a supply
chain in a global ledger. Each component would have its own entry on the blockchain
that gets tracked over time. Both companies could then update the status of a com-
ponent in real time. The end result is once you receive your computer, you could
track every component back to its manufacturer. Theoretically, you could trace the
supply chain all the way back to the mines where the raw materials came from.
Companies can also use the blockchain supply chain as a single source of truth for
their products. They can manage and monitor risks within the supply chain ensuring
the quality of delivered parts and track delivery status. Additionally, companies can
use smart contracts to manage and pay for supply chains autonomously. For exam-
ple, a chip manufacturer could be paid immediately upon testing of each individual
chip at the assembly facility. This would reduce the need for large contracts invoices
and the back-and-forth of refund requests for faulty components. Those same smart
contracts could assist with shipping and logistics, tracking valuable products as they
travel around the world. Using blockchain companies can finally have a complete
picture of their products at every stage in the supply chain bringing transparency to
the production process while reducing the cost of manufactured goods.
5 Key Challenges for Block Chain and IoT
5.1 Operational
The IoT and blockchain technologies are connecting several devices working on sev-
eral platforms. The devices communicating with each other might face the problem
of compatibility with each other. In order to make these technologies operational
efficiently, we need a common platform for all the devices and inbuilt technologies
[5].
5.2 Technical
The major technical issues of blockchain and IoT technology are scalability, security,
and storage requirement. The issue of security has already been discussed in detail.
So coming to the issue of scalability which means that the capacity to process a
transaction on the blockchain is limited. In the case of financial transactions, there
happens several thousands of transaction per second. This means that in blockchain](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-27-320.jpg)
![16 A. M. Saghiri et al.
Fig. 1 Number of connected devices [2]
that, by 2020, 100% of its products will be available on the Internet [1]. Figure 1
shows that the number of connected devices has surpassed the human population and
continues to rise.
In this chapter, we focus on the implementation perspective in three fields:
blockchain technology, AI, and the IoT. The rest of the chapter is organized as fol-
lows. Section 2 discusses the implementation perspective of blockchain platforms. In
Sects. 3 and 4, some important IoT and AI platforms for implementation are studied.
A hybrid system based on IoT, AI, and Blockchain is explained in Sect. 5. Finally,
the conclusions and future work are given in Sect. 6.
2 Blockchain Implementation Perspective
Blockchaintechnologycanbeusedtodesignadecentralizedsystemfortracking,doc-
umenting, and facilitating transactions. In this section, we study the most important
platforms for implementing the blockchain. There are many solutions for blockchain-
based applications in the literature. In this section, we survey eight well-known solu-
tions.
2.1 Bitcoin
Bitcoin, which was first registered in 2008, refers to a collection of concepts and
technologies which establishes the basis for a digital money ecosystem [3]. Bitcoin
users communicate with each other by utilizing a special form of peer-to-peer pro-
tocol primarily via the Internet. The Bitcoin protocol stack, which is available as](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-30-320.jpg)
![The Internet of Things, Artificial Intelligence, and Blockchain… 17
Fig.
2
Bitcoin
overview
[4].
Source
Mastering
Bitcoin
Programming
the
Open
Blockchain](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-31-320.jpg)
![18 A. M. Saghiri et al.
open-source software, can be used on a wide range of computing devices such as
laptops and smartphones, which can lead to easier and greater Bitcoin accessibility.
Some well-known features of Bitcoin are given as follows [4]:
• A decentralized peer-to-peer network (the Bitcoin protocol),
• A public transaction ledger (the blockchain),
• A set of rules used for validating independent transaction validation and issuing
the currency (consensus rules), and
• A mechanism for obtaining a global decentralized consensus on the valid
blockchain (proof-of-work algorithm).
In order to develop an application based on Bitcoin, some of the best libraries and
programming languages are mentioned in [4] (Fig. 2).
2.2 Ethereum
Ethereum is considered to be a trusted computational platform, along with a native
currency, which is established on top of a decentralized peer-to-peer network. Any
digital content which can be controlled by someone may be saved in an Ethereum
smart contract, which is then transferred between peers without requiring a third
party or middleman, such as a bank, exchange, or central government [5]. The data
stored in smart contracts are safe and easy to access, although the cost and structure
of the store are more related to metadata-related applications because saving real data
is too expensive. Figure 3 presents an architecture for the entire Ethereum ecosystem
on a network. The Ethereum Virtual Machine is mostly utilized for directing smart
contracts, as well as establishing a consensus among all participants [6].
In the Ethereum ecosystem, the following play important roles:
• Whisper: Ethereum has its own messaging protocol called Whisper. Whisper is
a decentralized chat mechanism on the Ethereum platform which operates on a
peer-to-peer protocol.
Fig. 3 Ethereum ecosystem [6]](https://image.slidesharecdn.com/60300-250428075426-88a0e988/85/Advanced-Applications-of-Blockchain-Technology-Shiho-Kim-32-320.jpg)
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- 4. Studies in Big Data 60 Shiho Kim Ganesh Chandra Deka Editors Advanced Applications of Blockchain Technology
- 5. Studies in Big Data Volume 60 Series Editor Janusz Kacprzyk, Polish Academy of Sciences, Warsaw, Poland
- 6. The series “Studies in Big Data” (SBD) publishes new developments and advances in the various areas of Big Data- quickly and with a high quality. The intent is to cover the theory, research, development, and applications of Big Data, as embedded in the fields of engineering, computer science, physics, economics and life sciences. The books of the series refer to the analysis and understanding of large, complex, and/or distributed data sets generated from recent digital sources coming from sensors or other physical instruments as well as simulations, crowd sourcing, social networks or other internet transactions, such as emails or video click streams and other. The series contains monographs, lecture notes and edited volumes in Big Data spanning the areas of computational intelligence including neural networks, evolutionary computation, soft computing, fuzzy systems, as well as artificial intelligence, data mining, modern statistics and Operations research, as well as self-organizing systems. Of particular value to both the contributors and the readership are the short publication timeframe and the world-wide distribution, which enable both wide and rapid dissemination of research output. ** Indexing: The books of this series are submitted to ISI Web of Science, DBLP, Ulrichs, MathSciNet, Current Mathematical Publications, Mathematical Reviews, Zentralblatt Math: MetaPress and Springerlink. More information about this series at http://www.springer.com/series/11970
- 7. Shiho Kim • Ganesh Chandra Deka Editors Advanced Applications of Blockchain Technology 123
- 8. Editors Shiho Kim School of Integrated Technology Yonsei University Incheon, Korea (Republic of) Ganesh Chandra Deka RDSD&E, NE Region Guwahati, Assam, India ISSN 2197-6503 ISSN 2197-6511 (electronic) Studies in Big Data ISBN 978-981-13-8774-6 ISBN 978-981-13-8775-3 (eBook) https://doi.org/10.1007/978-981-13-8775-3 © Springer Nature Singapore Pte Ltd. 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore
- 9. Preface The initial and the most popular application of Blockchain was cryptocurrency. Blockchain technology is likely to revolutionize various domains by providing a secure and fast end-to-end users’ transaction without the intervention of any trusted third party or central authorities. Although there are various technical and security threats associated with Blockchain technology, they can be tackled with the novel technology, tools, and frameworks. A holistic and coordinated effort between the government, business, and academia will take Blockchain technology to higher standards. This edited book having 13 chapters contributed by academia, practi- tioners, and researchers from reputed universities/organizations from various countries deliberates upon the different aspects of Blockchain technology. Chapter “Introduction to Blockchain and IoT” discusses the technical aspects of Blockchain and IoT. Some of the use cases of the Blockchain technology are also discussed in this chapter. Chapter “IoT, AI, and Blockchain: Implementation Perspectives” presents an implementation perspective of AI, IoT, and Blockchain. Four important Blockchain platforms such as Bitcoin, Ethereum, Hyperledger, and Stellar are also discussed. Chapter “Blockchain Technologies for IoT” describes the potential benefits and challenges of using Blockchain technology for IoT applica- tions and provides some use case, while Chapter “Blockchain Technology Use Cases” is a list of use cases which could rely on Blockchain and smart contracts, the most potential application of Blockchain technology. Chapter “Blockchain Meets Cybersecurity: Security, Privacy, Challenges and Opportunity” reviews the main IoT security issues associated with the adoption of Blockchain technology. The chapter also presents a comprehensive overview of blockchain as it relates to IoT security. Chapter “On the Role of Blockchain Technology in Internet of Things” deliberates about the private Blockchain in terms of scalability in different IoT devices. Chapter “Blockchain of Things (BCoT): The Fusion of Blockchain and IoT Technologies” is a survey on recent research articles and projects/applications on the implementation of the Blockchain for IoT Security and identifies associated challenges. Chapter “Blockchain Architecture” is about the issues in designing the Blockchain application development process and to identify the key participants in the Blockchain environments. v
- 10. Chapter “Authenticating IoT Devices with Blockchain” is about the privacy and security concerns of IoT device authentication and authorization flaws in the heterogeneous deployment. Chapter “Security and Privacy Issues of Blockchain Technology” discusses the security and the privacy of Blockchain along with their impact with regard to different trends and applications. The chapter is intended to discuss key security attacks and the enhancements that will help develop better Blockchain systems. Chapter “Supply Chain Management in Agriculture Using Blockchain and IoT” discusses the implementation of a user-friendly Web-based platform in agricultural supply chain management using Blockchain technology to enhance agriculture-based product quality. Chapter “Blockchain Technologies and Artificial Intelligence” is about the capabilities of the intersection of AI and Blockchain and also discusses the standard definitions, benefits, and challenges of this alliance. Finally, Chapter “Blockchain Hands on for Developing Genesis Block” discusses the data processing models which are applicable in the Blockchain technology. We hope the reader of the book will be benefited by it’s diverse coverage of topics on Blockchain and IoT. New Delhi, India Prof. Shiho Kim Incheon, Korea (Republic of) Ganesh Chandra Deka vi Preface
- 11. Contents Introduction to Blockchain and IoT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Priyanka Rathee The Internet of Things, Artificial Intelligence, and Blockchain: Implementation Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Ali Mohammad Saghiri, Kamran Gholizadeh HamlAbadi and Monireh Vahdati Blockchain Technologies for IoT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 V. Dedeoglu, R. Jurdak, A. Dorri, R. C. Lunardi, R. A. Michelin, A. F. Zorzo and S. S. Kanhere Blockchain Technology Use Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Valentina Gatteschi, Fabrizio Lamberti and Claudio Demartini Blockchain Meets Cybersecurity: Security, Privacy, Challenges, and Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Philip Asuquo, Chibueze Ogah, Waleed Hathal and Shihan Bao On the Role of Blockchain Technology in the Internet of Things . . . . . . 129 Robin Singh Bhadoria, Atharva Nimbalkar and Neetesh Saxena Blockchain of Things (BCoT): The Fusion of Blockchain and IoT Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Mahdi H. Miraz Blockchain Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Ali Mohammad Saghiri Authenticating IoT Devices with Blockchain . . . . . . . . . . . . . . . . . . . . . 177 Asutosh Kumar Biswal, Prasenjit Maiti, Sodyam Bebarta, Bibhudatta Sahoo and Ashok Kumar Turuk vii
- 12. Security and Privacy Issues of Blockchain Technology . . . . . . . . . . . . . 207 Neha Gupta Supply Chain Management in Agriculture Using Blockchain and IoT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Malaya Dutta Borah, Vadithya Bharath Naik, Ripon Patgiri, Aditya Bhargav, Barneel Phukan and Shiva G. M. Basani Blockchain Technologies and Artificial Intelligence . . . . . . . . . . . . . . . . 243 Sundaresan Muthukrishnan and Boopathy Duraisamy Blockchain Hands on for Developing Genesis Block. . . . . . . . . . . . . . . . 269 Robin Singh Bhadoria, Yatharth Arora and Kartik Gautam viii Contents
- 13. About the Editors Shiho Kim is Professor at the College of Engineering, Yonsei University. He completed his M.S. and Ph.D. at the Department of Electrical Engineering, KAIST and he has more than 15 years of teaching experience. His research interests include intelligent vehicles, virtual reality, reinforcement learning, sensors for wireless environmental monitoring, thermoelectric sensors, thermoelectric power generators, and energy harvesting techniques. He has received the Korean Prime Minister and Presidential award in the International Robot Contest in 2008 and 2010 respec- tively. He was founder and Head Director of the Research Center for Advanced Hybrid Electric Vehicle Energy Recovery Systems (RAVERS) from 2009 to 2010. He was Chair of Vehicle Electronics Research Group from 2013 to 2014 and IEEE Solid-State Circuit Society Seoul Chapter from 2013 to 2015. Currently, he is Vice-chair of the Korean Institute of Next Generation Computing and has been an IEEE VR standard Advisory Board member since 2018. He has filed numerous patents in his area of research. Ganesh Chandra Deka is currently Deputy Director (Training) at Regional Directorate of Skill Development & Entrepreneurship, North Eastern Region, Assam under Directorate General of Training, Ministry of Skill Development and Entrepreneurship, Government of India, New Delhi, India. His research interests include e-Governance, Big Data Analytics, NoSQL Databases and Vocational Education and Training. He has authored 2 books on Cloud Computing published by LAP Lambert, Germany. He is the Co-author for 4 books on Fundamentals of Computer Science (3 books published by Moni Manik Prakashan, Guwahati, Assam, India and 1 IGI Global, USA). As of now he has edited 14 books (5 IGI Global, USA, 6 CRC Press, USA, 2 Elsevier & Springer 1) on Bigdata, NoSQL, Blockchain Technology and Cloud Computing in general and authored 10 Book Chapters. ix
- 14. He has published around 47 research papers in various National and IEEE International conferences. He has organized 08 IEEE International Conferences as Technical Chair in India. He is the Member of the editorial board and reviewer for various Journals and International conferences, IEEE, the Institution of Electronics and Telecommunication Engineers, India and Associate Member, the Institution of Engineers, India. x About the Editors
- 15. Introduction to Blockchain and IoT Priyanka Rathee Abstract The blockchain is emerging rapidly as a current area of research these days. The blockchain is a technology used to run bitcoin. It is distributed database maintaining a list of record growing continuously called blocks in order to ensure the security of those blocks from revision and tampering. Every block is connected to other blocks by maintaining the hash of the previous block in the chain. This chapter discusses the technical aspects of blockchain and IoT. The IoT is merely not a concept these days. It is the necessity of time in everyday life. The “smartphone” is the most familiar application of IoT in the day-to-day life. The application of IoT is not limited to smart homes. It is ranging from industrial and commercial sectors to agriculture, public safety, and the health sector. The IoT can also be considered as “Internet of Everything (IoE)” because of a wide range of real-life applications of IoT. Keywords Bitcoin · Blockchain · IoT 1 Introduction The blockchain principle was introduced initially for bitcoin, which provides widely distributed and secured database. In IoT, there is a network of multiple devices which communicate with each other without direct human intervention. It facilitates quick transfer of data in an efficient manner. The IoT-enabled devices leads to operational improvements in terms of efficiency, performance, and safety. The IoT can also be thought of as a one unit global network. The implementation of IoT applications also projects revenue and growth in the IoT market. The IoT consists of intelligent devices or machines which communicate to other devices, things, machines objects, or infrastructure. Things in IoT referred to objects of physical as well as a virtual world which has the capacity to integrate within the communication network. It can be static or dynamic. P. Rathee (B) University of Delhi, Delhi, India e-mail: rathee.priyanka124@gmail.com © Springer Nature Singapore Pte Ltd. 2020 S. Kim and G. C. Deka (eds.), Advanced Applications of Blockchain Technology, Studies in Big Data 60, https://doi.org/10.1007/978-981-13-8775-3_1 1
- 16. 2 P. Rathee 1.1 Background and Motivation First, we need to understand two basic terms. One is bitcoin and another one is blockchain. The digital coin is called bitcoin. It is money which is digital. The blockchain is a technology which helps the transmission of digital coins or assets from one person to another person. It is very important to note that bitcoin is different from the blockchain. Now after understanding the basic meaning of bitcoin and blockchain, what are the problems a blockchain attempts to solve? One problem is money transfer. I will be explaining it conceptually. In this section, I’m going to focus on concept rather than implementation details. For example, a person A wants to transfer money to person B. It is usually performed with the help of a third trusted party. The working of blockchain is described as follows: A sends the money to the third party and the third party identifies the B as the right person/account to transfer. This took 3–4 days typically. What blockchain does here? Blockchain avoids involving the third party and therefore perform the action faster and cheaper than the traditional method. Internet of Things The IoT is merely not a concept these days. It is the necessity of time in everyday life. The “smartphone” is the most familiar application of IoT in the day-to-day life. The application of IoT is not limited to smart homes. It is ranging from industrial and commercial sectors to agriculture, public safety, and the health sector. The IoT can also be considered as “Internet of Everything (IoE)” because of a wide range of real-life applications of IoT. In IoT, there is a network of multiple devices which communicate with each other without direct human intervention. It facilitates quick transfer of data in an efficient manner. The IoT-enabled devices leads to operational improvements in terms of efficiency, performance, and safety. The IoT can also be thought of as a one unit global network. The implementation of IoT applications also projects the revenue and growth in the IoT market. The IoT consists of intelligent devices or machines which communicate to other devices, things, machines objects, or infrastructure. Things in IoT referred to objects of physical as well as a virtual world have the capacity to integrate within the communication network. 1.2 History of Blockchain Underline theme of blockchain is not a new concept. In fact, it has been inspired by the timestamp ordering algorithm of the 90s which was used to prevent tampering of documents. The same thing has been extended for the purpose of ledgers and trans- actions in order to facilitate secure payment mechanisms. Blockchain was invented in a paper published by Satoshi Nakamoto in the year 2008. Since then various pro- grammers, cryptographers, and scientists have worked on this concept of blockchain to produce a cryptocurrency network called the bitcoin. The major design goal and
- 17. Introduction to Blockchain and IoT 3 the purpose of the blockchain were to solve two major problems. The first is to solve the double spending problem and second was to eliminate the need of central trusted third party. 2 Technical Aspects of Blockchain Technology The blockchain is a chain of blocks that contain information. Originally, this tech- nique was introduced in 1991 by the group of researchers and was originally meant for digital documents timestamp so it is not possible to backdate the documents or to tamper them. However, it was not in proper use until it was used and adapted by Satoshi Nakamoto in the year 2009 in order to create a digital cryptocurrency bitcoin [1]. 2.1 Concept and Working of a Blockchain The blockchain is a collection of blocks, which is totally open and public to everyone. The open ledger in the blockchain is distributed in nature. The important feature of blockchain is that once the data is recorded into the ledger, then that data can’t be erased. How does the blockchain work? Every block present in the chain consists of the data, hash to that particular data and the previous hash. The data recorded in the blockchain depends on the type of the blockchain. If the blockchain is related to bitcoins, it will store data for transactions, the information about the sender and receiver and the number of bitcoins present in the network. Each block in the chain is having a hash value that can be compared with the fingerprints. As the new block is created, the hash of that particular block will also be generated. The hash of the block will be changed with the modifications made in the block. Therefore, the hash value is a very important factor while making modifications in the block. If the hash value of any block will be changed, then it will not be considered to be in the same block. Other than the hash of the current block, the block also holds the hash of the previous block. This helps to make a chain by linking the current block to the previous block. These features of a block in the chain makes blockchain more secure. Consider an example of a chain having three blocks. As shown in Fig. 1, every block consists of the hash value of the current block and the previous block. In the figure the block number 2 is pointing toward the block number 1, block number 3 is connected to block number 2 using the previous hash. The previous hash of the first block is 0000 because it a special block which is not pointing back to any block. This block is known as the Genesis block. Now suppose somebody wants to tamper block number 2. With the tampering of the block, the hash value of that block will also be changed. In that case, the third block and the following blocks connected in the chain will stand invalid because there is no valid hash present at that moment. Therefore, changing one block in the chain will result in invalidating all the following blocks
- 18. 4 P. Rathee Hash: 1P5F Hash: 2Q6R Hash: 3D2L Previous hash: 1P5F Previous hash: 2Q6R Previous hash: 0000 1 2 3 Genesis block Fig. 1 Blockchain structure in the chain. In order to make it valid, the hacker needs to change the hash value of all the following blocks. Though it a good idea to make the blockchain secure it is not sufficient to stop tampering. With the advancement in computer technologies, hundreds or thousands of hash values can be calculated per second. Anyone can change the hash of the current block and the following hash using the computational technologies. In that case, those blocks will be valid even after tempering. Therefore, in order to make it less serious, the blockchain introduces a concept known as proof of work. Using the technique of proof of work, the creation of the new block gets slow down up to some extent. In this case of bitcoin, the calculation of proof of work requires nearly 10 min in order to add the new block in the chain. This technique enhanced the security in the blockchain. Because if someone will try to tamper with any block in the chain then he has to recalculate the proof of work for all the following blocks which are quite difficult. Therefore, the collective use of hashing technique and the proof of work mechanism make the blockchain more secure. One of the major advantages of blockchain is its distributed nature, which makes blockchain secure themselves. Rather than the centralized system of managing the chain, blockchain uses peer-to-peer network. As the blockchain is open and public, anyone can join the network. After joining the network, the participant will be get- ting the complete copy of the chain. The node can verify using that copy whether everything is happening in order or not. Now if somebody creates a new block, then what happens? The block will be sent to everyone present in the network. Each node will verify that block in order to ensure that the block is genuine or tempered. After verification, the new block that is created recently and verified will be added by each node in their copy of the chain. Then an agreement is created by all the nodes in the network. They make a consensus on which block is valid and which is not. If the block is valid, it will be added in the chain. If the block is tempered with, then it will be rejected by all the nodes. Therefore, in order to temper with one block, one has to temper with all the blocks present in the chain, recalculate the has and the proof of work for all the blocks. After doing that, only the tempered block will be accepted by others present in the network, which is nearly impossible to perform. That is why the combination of hash and proof of work is quite a secure mechanism for blockchain [2]. The blockchains are evolving day by day. The smart contracts are the most recent development of the blockchain. The smart contacts are used to transfer coins among
- 19. Introduction to Blockchain and IoT 5 the nodes in the network automatically on the basis of some conditions and are recorded in the blockchain. The blockchain technology is creating interest for many users these days. Other than the transfer of bitcoin, this technology can also be used in other sectors as well, like managing medical records, tax collection, digital notary creation, etc. 2.2 Principle of Blockchain Technology This section will be discussing the principle of blockchain technology. Now let’s see how the problem of money transfer is being addressed by blockchain. The first principle related to a blockchain is an open ledger. This concept is explained with the help of an example. Suppose there is a network connected by four people who are interested in transferring money to each other. Suppose A is the genesis node and currently has $10. Let’s focus on the concept of an open ledger and its implementation in blockchain technology. Suppose the person A wants to transfer money to B, let us say he wants to transfer $5 to B. Now what will happen in the blockchain. In the existing blockchain, one more transaction will be added which depicts that A sends $5 to B. After this transaction, now B wants to transfer $3 to D. similarly there will be existing ledger and the new transaction will be clubbed in the existing chain. On the same line, if D wants to transfer $1 to C, the new transaction will be added to the existing chain. That means anyone can add its transaction to the ledger. This concept is known as an open ledger. The chain of the transaction is kept on adding the new blocks, therefore it is known as the blockchain. This chain is open and public to everyone present in the network. That means each and everyone present in the network can trace the movement of money in the network, how much money others are having in their wallet. It can also be decided by everyone in the network whether the transaction is valid or not. For example, at this moment if A wants to transfer $12 to C, then it is not a valid transaction. Because A started with $10 and had already sent $5 to B. Then, in this case, A is left with only $5 in its wallet. So it can’t initiate a transaction of $10. Therefore, it can easily find out that this is not a valid transaction. This transaction will not be the part of a chain and will not be clubbed in the open ledger (Fig. 2). The distributed ledger is the second principle of the blockchain. One of the major goals of blockchain chain technology is to get rid of the centralized system. Therefore, distributed ledger is another principle of the blockchain. The open ledger will be distributed among all nodes in the network. That means everyone in the network will be having their copy of open ledger. It means there is no need to have a centralized place to store the open ledger as everyone will keep it in their personal space. But again it may arise some problem. All the copies of the ledger present in the network must be synchronized so that all the participants can watch the same version of the open ledger. The solution of this problem leads to the emergence of the third principle of blockchain, i.e., synchronized ledger. How the nodes in the distributed environment
- 20. 6 P. Rathee Fig. 2 Open ledger A=$10 A→B $5 B→D $3 D→C $1 A B D C $5 $3 $1 of storing open ledger can be synchronized? Suppose B is willing to transfer $5 to C. Then B will broadcast this intended transaction in the network. Everyone present in the network can immediately notice that B wants to transfer $5 to C. Till now, it is an invalidated transaction. It is not yet approved and will not be added into the open ledger. Here comes the concept of miners. The special node holding the ledger is called miner. Suppose A and D are miners for this case. Following are the functions to be performed by miners. There will be the competition among miners at this moment that who will validate this transaction first in order to add it in the open ledger. The miner winning the competition by validating the transaction first will be rewarded financially in the form of bitcoin. In order to win the competition that means to validate and add the transaction in the open ledger first, the miners have to perform two things: initially, the transaction needs to be validated. As the ledger is open and public. Anyone present in the network can immediately calculate whether the initiated transaction is valid or not. The second task the miner has to do is finding the special key. This key will assist the miner to find the previous transaction and to lock the current transaction. The miner has to invest more time and computational power because searching the key is completely random. The miner will do it by hit and trial method by guessing the new keys repeatedly until it will find the correct match of the key. The miner finishing this task first will get the financial reward. Now how the distributed ledgers will be synchronized in the network. The miner getting the key first will edit the transaction to its own ledger. Say A wins the compe- tition and edits its ledger first. Now A will broadcast and publish this modified ledger to the network. This will save the time of other participants and they will directly append the changes in their ledger. The solution and the key will be published in the network. The other participants can use the key and solution to edit their ledgers.
- 21. Introduction to Blockchain and IoT 7 2.3 Distributed Power The Blockchain is nothing but a group of blocks or a chain of blocks. Each block is going to contain some data and in the context of the blockchain, that data is a ledger or a transaction. Let’s say at time T = 0 is the time when the first block was added to the blockchain system and this block which was added at T = 0 is called the Genesis block. Each block of the blockchain also linked to other blocks via linkages to the previous blocks. So in other words, each block of the blockchain has a reference to its previous block. This is how each block of the blockchain is connected to each other. One of the major architectural aspects of blockchain is that blocks are distributed across the P2P network. The P2P is a network wherein each node of the network is connected to every other node of the network. These are the nodes, which also help to store the blocks as well as to do some mining process on the blocks as per the criteria which are mentioned in the blockchain algorithm. This arrangement with which the blocks and the ledgers are distributed across the various nodes of the network is also called as distributed ledger technology or DLT. The DLT is also abbreviated as an alternative name of blockchain in order to make it more generic. 2.4 Security The blockchain is one of the most fundamental technologies underpinning. One area where the number of people getting excited to use blockchain is identity. Identity is a very important concept at the basis of any security puzzle because if you know who you are talking to, where they are coming from, then you can trust them. Blockchain with its replicated storage and its decentralized management offers some exciting possibilities for storing and providing access to identities which can then be used in bigger transactions [3]. 2.5 Transparency One of the core philosophies of blockchain is transparency or visibility. So there is open ledger for all to see what happened. Deterrence is a useful way of stopping bad things from happening. If people know that the record of what they are doing is going to be laid bare to be checked later to be verified, they often just won’t do the bad things in the first place. It is not worth if the risk of getting caught is too high. So in principle, this openness and transparency is a great way of taking out some of the security problems and some requirements from technology from blockchain-based systems.
- 22. 8 P. Rathee 2.6 Privacy Not everything should be laid open for everybody to see. The details of a transaction may be private between the people who did it for very good reason. So getting the balance of openness and transparency with other reasonable expectations of privacy and secrecy is trick one. 2.7 Smart Contract Another core technology associated with blockchain is called smart contract. These are little pieces of code that can execute automatically without any interference from external systems. These are basically set up and if something happens in the future then the other thing should happen as a consequence. For example, if I sell something at a certain price, the money should automatically move and I don’t need to get in the way of that. In terms of insurance if an event happens which triggers my insurance automatically get paid. 3 Blockchain and IoT Implications 3.1 Economic Implication Blockchain technology has relevance for all areas but because of its nature as a secure value exchange protocol, the most readily identifiable ones are within finance, busi- ness, and economy. As with other areas, the blockchain has the capacity to decen- tralize economic activity creating a distributed peer-to-peer networks of exchange. It greatly expands the scope and extent of economic markets and finances within the ongoing developments of economic globalization were in the process of massive scaling up of the global economy of exchange. The blockchain has many applications for enabling the global economy of exchange including its capacity to establish prop- erty rights where previously there were none in enabling supply chain provenance in business collaborations in the industry. The components in enabling economic exchange are 1. Property rights: The first component in enabling economic exchange in develop- ments is the capacity to define and enforce property rights. Traditional top-down attempts have been costly to implement on large scale and have been unsuccess- ful at increasing global property rights. A bottom-up approach instead follows a process wherein claims are made by individuals verified by those affected aggre- gated by the community and then brought to the legal authority. The blockchain
- 23. Introduction to Blockchain and IoT 9 user monitored digital registry is a kind of tool that allows communities to serve themselves in the face of unresponsive governments. 2. Supply chains: These are one of the primary areas of blockchain which has found application and is largely due to the fact that they involve many different organi- zations. Here it works to improve collaborations by creating a single database and source of truth. It can reduce fraud and corruption, automate a manual process, and control for issues of authentication. With blockchain technology, one can get a much more granular view of the complete supply chain. The things can be recorded like all of the manufacturing data for an aircraft assembly where all of the elements or the subsystems have been in its journey from the original man- ufacturer all the way through to integration into the final aircraft. The hashing and time stamping capacity of the blockchain means we can record exactly who does what with asset over the life cycle with all the parties having access to and being able to trust this data. Currently, the supply chain for many organizations is very complex in pack given the fact that they have many tiers to them with many different parties involved. It is difficult to find the issue that where it came from when something went wrong. With the blockchain registry, this information can be known almost immediately. Therefore, the whole supply chain management becomes much more effective and transparent using blockchain. 3. Finance: The application of blockchain technology to finance are many. A new model of venture capital in the form of initial coin offerings to prediction markets. By adding a layer of automated trust and building market platforms, blockchain technology offers the real possibility. 3.2 Technological Implications While moving into the world of connectivity and networks, a new technology paradigm is emerging. It is called the internet of things. The technology paradigm of the industrial age was one of the machines, standalone mechanized systems. They were physical in nature, monofunctional, and mechanized. It is a world where indi- vidual component technologies are instrumented and connected into large networks devices that can communicate peer–peer, adapt, and self-organized around the end users needs. So as to deliver a seamless service, the best illustration of this is a smart city where different systems no longer exist in silos but are interconnected and organized around end users needs through information networks. The internet of things is a journey that we are just beginning on over the course of the next decades. Billions of devices will come online. The amount of data the internet has to han- dle will grow massively as a vast network of devices and machines continuously communicate with each other to coordinate production processes for transport and logistics for construction, climate control, etc. This requires an IT infrastructure that goes far beyond the existing capacities of the internet in terms of dealing with the massive amount of secure data, secure communication transactions and automated micro exchanges of value. The role of blockchain is already discussed above in these
- 24. 10 P. Rathee areas. The combination of IoT and blockchain seems to be a very efficient technology in every field. Blockchain networks could provide a robust and decentralized system for handling these issues on the micro level of individual devices and machines. The internet of things going to need micropayments systems where devices can pay automatically on demand based on the resources they consumed [4]. 3.3 Social Implication of Blockchain and IoT There are various social implications of blockchain and IoT. Some of them are illustrated as follows: Personal responsibility: It puts the responsibility of an individual solely in their hands. You can no longer offload responsibility if you live in a completely open environment. If you lose your private key, your money is gone. Spreading of value distribution: One is also spreading the value of distribution if one takes note of a few hacks in exchange. The system can’t be broken. The whole things can’t be taken down by taking a single part of it. Only can be done is the value distribution existing in the network. All of the data or value is held at the end nodes. Service in transit: People who try to build on top of the network focus on actually providing service through transit. The money is transmitting, and never held by one node. The data is transformed and moved it somewhere else. Large-scale agreement of information: As opposed to the client–server model, data on one application may doesn’t correspond to the same redundant data on another application. So when you have things like a consortium of banks, you have to have a lot of middlemen which have to keep track of a lot of auditing. The blockchain solves this problem in order to make the payment and money transfer system by making it completely automated. As the blockchain technology is decentralized, so the problem of the middleman is also got solve by using blockchain. And apart from it, the IoT provides the interconnection of all the devices and blockchain provides the decentralized property. Therefore, the combination of two makes it convenient for the agreement of information on a large scale. 4 Blockchain Use Cases for IoT 4.1 Healthcare Industry This section will illustrate how emerging technologies can be leveraged by the health- care industry to capture, manage, and analyze patient details. The data sent by the patient is recorded and presented to the doctors through IoT application. The doctor can record the patient’s medical history and store it in a blockchain. Thereby pro- viding immutability to the patient’s medical record. In the end states, doctors will
- 25. Introduction to Blockchain and IoT 11 be able to share patient’s record with other doctors with explicit authorization from the patient. The patient can be charged for storing and sharing medical records. This could lead to the creation of a thriving e-commerce platform. The application and all its components are hosted on the cloud. One cloud is IBM blue-mix cloud. There are several other clouds also available. Anyone of them can be used. 4.2 Public Safety—Secure Communication for Critical Incidences This section will be explaining the public-key infrastructure (PKI) for IoT. What is the role of PKI in IoT? PKI serves to support building and maintaining trust in the IoT ecosystem. Aligning with traditional information security principles, the first role we are looking for PKI is authentication, authenticating devices to the cloud services between users and devices and from things to things. It is also an open standard for interoperability. Privacy is the major concern for all the devices and applications available online. Encrypting communications to and from these devices is essential. Applying PKI affords some basic and essential mechanisms ensuring the privacy of communications using encryption. The integrity of data is a very important factor to be considered during communication. With the introduction of IoT, the devices got automated and capable of taking decisions without the interference of human. In such situations, both the risk and the value are related directly to the integrity of data. The example of PKI implementation is cellular signal amplifier devices— spider cloud wireless. Spider cloud node sits within a warehouse or office building to build a system that extends mobile coverage. During manufacturing, publicly trusted certificates are embedded into a trusted platform module which enables a secure boot process, mutual authentication, and encrypted communication with the spider cloud appliances. They accomplish this leverage in Globalsign’s M/SSL platform and APIs to provision certificates during manufacturing and also during the system life cycle to reissue and renew the certificates. The next example is networking appliances— Nepara. Back in 2008, they became the first company to use a fully vetted X.509 digital certificate for networking gear which they managed over HTTPs. They choose to use PKI to solve their problems of identifying the device and encrypting the connection. To implement this, each appliance has its own unique fully qualified domain name. They use the API to import CERT on each device. It was important to include the certificates with each appliance so that the end user organization wouldn’t have to obtain a certificate themselves or use a self-signed certificate. They also choose to use publically trusted certificates so as administrators would be shown trust indicators when accessing the devices with browsers rather than the self-signed certificates, which they have to use for beta deployments.
- 26. 12 P. Rathee Home owner Renter Access management and security Lighting and temperature control Rent “add-on” rooms &devices Fig. 3 DApp functionalities 4.3 Smart Homes This use case study will discuss how homeowners can control and share their smart homes. Today, platforms like Airbnb own our personal data and have high fees while public listing less trust and security. NKN and IoTeX blockchain technology addresses these issues and offers a new decentralized alternative to short-term home rentals. They integrate lightweight IoT devices to the blockchain-smart locks, ther- mostats, and lights. They developed a DApp running on NKN’s peer-to-peer network and IoTeX’s smart contract platform. It lets the user control and authorizes access to their smart homes in fully P2P fashion. It is the first step towards the “Airbnb of the future”. Homeowners can securely authorize access to their smart homes. Authorize guests can seamlessly control lights, thermostats, and other connected devices. They can even unlock add-on rooms or equipment closets in real time through a conve- nient mobile application. With blockchain, homeowners can enjoy full control of their smart homes and data while offering renters the same convenience and a cus- tom rental experience. To bring it to a full circle, access can be securely shared with multiple people, and all terms between parties are enforced by smart contracts. The collaboration shows the possibilities of blockchain and IoT technologies (Fig. 3). 4.4 Supply Chain Management—Smart Supply Contracts In this section, the impact of smart contacts on the supply chain will be elaborated. Let’s imagine you decide to purchase a new computer. However, in this case, let’s imagine you are also concerned about the working conditions in the factory where the computer was assembled. You may have a concern about the quality of a specific component inside the computer. Right now, there is no easy way to check from where your computer came and how it got made. The complex web of relationships that provide the materials, manufacture the components, assemble the parts, and deliver the computer to market is known as the supply chain. Hundreds of years ago sup- ply chains were fairly simple. Miners and farmers provided natural resources to a skilled craftsman like blacksmiths and tailors who then created and sold finished products. Today’s supply chains are much more complicated, fragmented, and dif- ficult to understand. Hundreds or even thousands of suppliers all around the world contribute to make and ship the computer you purchased. Most of the time various
- 27. Introduction to Blockchain and IoT 13 companies don’t know about each other. As a consumer, you don’t know anything about how, where, when, what, under what conditions your computer was made. This is not just a problem for consumers. Today’s supply chain is so complex that even Apple, Dell, or HP has difficulty in tracking that how their computers get made. Smart contracts could make supply chain management simpler and more trans- parent. The idea is to create a single source of information about products in a supply chain in a global ledger. Each component would have its own entry on the blockchain that gets tracked over time. Both companies could then update the status of a com- ponent in real time. The end result is once you receive your computer, you could track every component back to its manufacturer. Theoretically, you could trace the supply chain all the way back to the mines where the raw materials came from. Companies can also use the blockchain supply chain as a single source of truth for their products. They can manage and monitor risks within the supply chain ensuring the quality of delivered parts and track delivery status. Additionally, companies can use smart contracts to manage and pay for supply chains autonomously. For exam- ple, a chip manufacturer could be paid immediately upon testing of each individual chip at the assembly facility. This would reduce the need for large contracts invoices and the back-and-forth of refund requests for faulty components. Those same smart contracts could assist with shipping and logistics, tracking valuable products as they travel around the world. Using blockchain companies can finally have a complete picture of their products at every stage in the supply chain bringing transparency to the production process while reducing the cost of manufactured goods. 5 Key Challenges for Block Chain and IoT 5.1 Operational The IoT and blockchain technologies are connecting several devices working on sev- eral platforms. The devices communicating with each other might face the problem of compatibility with each other. In order to make these technologies operational efficiently, we need a common platform for all the devices and inbuilt technologies [5]. 5.2 Technical The major technical issues of blockchain and IoT technology are scalability, security, and storage requirement. The issue of security has already been discussed in detail. So coming to the issue of scalability which means that the capacity to process a transaction on the blockchain is limited. In the case of financial transactions, there happens several thousands of transaction per second. This means that in blockchain
- 28. 14 P. Rathee we have some constraints of security, scalability, and storage capacity. Thought the researchers are working on these issues and improving day by day. 5.3 Legal and Compliance Issue Though it is very excited to have new technology on board, the internet lacks the ability to currently connect back to the real world in the way that machine-to-machine world as presented by the internet of things. Internet of things is not just the internet of things, it is the internet of behavior, and internet of life. What are some ethical concerns that people are thinking about are quality control and accountability? Ulti- mately, one wants to know where who do we go to when someone breached a legal parameter and it is getting quite difficult. Another issue is the repository of informa- tion that will be created. What will be the criteria of identity when we as a lawyer think about how to protect personal data. This is a legal and ethical concern how to put that in a framework and monitor and govern that. 6 Conclusion In this chapter, we discussed the concept of blockchain, how does blockchain works? The various technical aspects of blockchain were described including the principles of blockchain, distributive power, security, privacy, and smart contracts. After that, the implications of blockchain and IoT in terms of economic, technological, social and political were elaborated. Initially, blockchain was used for transferring bitcoins but later it was applied to various other sectors like medical records management, tax collection, etc. So some of the use cases of this technology are also given in the chapter. As the new technology is emerging so there will be various issues related to technology. So, the key challenges to the blockchain and IoT technology are explained in the chapter. References 1. Banafa, A.: IoT and blockchain convergence: benefits and challenges. IEEE Internet of Things (2017) 2. Khan, M.A., Salah, K.: IoT security: review, blockchain solutions, and open challenges. Futur. Gener. Comput. Syst. 82, 395–411 (2018) 3. Banafa, A.: IoT standardization and implementation challenges. IEEE. Org Newsletter (2014) 4. Serrano, M., Soldatos, J.: IoT is more than just connecting devices: the open IoT stack explained (2015) 5. Somov, A., Giaffreda, R.: Powering IoT devices: technologies and opportunities. Newsletter (2014)
- 29. The Internet of Things, Artificial Intelligence, and Blockchain: Implementation Perspectives Ali Mohammad Saghiri, Kamran Gholizadeh HamlAbadi and Monireh Vahdati Abstract Blockchain technology, Artificial Intelligence (AI), and Internet of Things (IoT) will be used as the infrastructure of modern applications in the near future. Therefore, we need to know some information about the implementation of them. For this purpose, many tools and applications have been reported in the literature. In this chapter, we show how an application can be implemented using blockchain, AI, and IoT. In addition, we will introduce an approach for designing this type of applications using object-oriented techniques. At first, we summarize popular implementation technologies. Then, an implementation perspective based on object- oriented concepts for cognitive IoT based on blockchain is given. Finally, two case studies are analyzed. Keywords Blockchain technology · Artificial intelligence · Internet of Things 1 Introduction Blockchain technology, Artificial Intelligence (AI), and the Internet of Things (IoT) will lead to a revolution in modern countries. The Internet is currently being managed by humans, who can use it to communicate with each other. However, this pattern is changing, as new types of devices are starting to use the Internet. These devices are not managed by humans, rather they communicate with each other and things are identified as main elements—this is known as the IoT. Samsung recently reported A. M. Saghiri (B) Institute for Research in Fundamental Sciences (IPM), Tehran, Iran e-mail: Saghiri@aut.ac.ir Computer Engineering and Information Technology Department, AmirKabir University of Technology, Tehran, Iran K. G. HamlAbadi · M. Vahdati Islamic Azad University, Qazvin, Iran e-mail: k.gholizadeh@qiau.ac.ir M. Vahdati e-mail: m.vahdati@qiau.ac.ir © Springer Nature Singapore Pte Ltd. 2020 S. Kim and G. C. Deka (eds.), Advanced Applications of Blockchain Technology, Studies in Big Data 60, https://doi.org/10.1007/978-981-13-8775-3_2 15
- 30. 16 A. M. Saghiri et al. Fig. 1 Number of connected devices [2] that, by 2020, 100% of its products will be available on the Internet [1]. Figure 1 shows that the number of connected devices has surpassed the human population and continues to rise. In this chapter, we focus on the implementation perspective in three fields: blockchain technology, AI, and the IoT. The rest of the chapter is organized as fol- lows. Section 2 discusses the implementation perspective of blockchain platforms. In Sects. 3 and 4, some important IoT and AI platforms for implementation are studied. A hybrid system based on IoT, AI, and Blockchain is explained in Sect. 5. Finally, the conclusions and future work are given in Sect. 6. 2 Blockchain Implementation Perspective Blockchaintechnologycanbeusedtodesignadecentralizedsystemfortracking,doc- umenting, and facilitating transactions. In this section, we study the most important platforms for implementing the blockchain. There are many solutions for blockchain- based applications in the literature. In this section, we survey eight well-known solu- tions. 2.1 Bitcoin Bitcoin, which was first registered in 2008, refers to a collection of concepts and technologies which establishes the basis for a digital money ecosystem [3]. Bitcoin users communicate with each other by utilizing a special form of peer-to-peer pro- tocol primarily via the Internet. The Bitcoin protocol stack, which is available as
- 31. The Internet of Things, Artificial Intelligence, and Blockchain… 17 Fig. 2 Bitcoin overview [4]. Source Mastering Bitcoin Programming the Open Blockchain
- 32. 18 A. M. Saghiri et al. open-source software, can be used on a wide range of computing devices such as laptops and smartphones, which can lead to easier and greater Bitcoin accessibility. Some well-known features of Bitcoin are given as follows [4]: • A decentralized peer-to-peer network (the Bitcoin protocol), • A public transaction ledger (the blockchain), • A set of rules used for validating independent transaction validation and issuing the currency (consensus rules), and • A mechanism for obtaining a global decentralized consensus on the valid blockchain (proof-of-work algorithm). In order to develop an application based on Bitcoin, some of the best libraries and programming languages are mentioned in [4] (Fig. 2). 2.2 Ethereum Ethereum is considered to be a trusted computational platform, along with a native currency, which is established on top of a decentralized peer-to-peer network. Any digital content which can be controlled by someone may be saved in an Ethereum smart contract, which is then transferred between peers without requiring a third party or middleman, such as a bank, exchange, or central government [5]. The data stored in smart contracts are safe and easy to access, although the cost and structure of the store are more related to metadata-related applications because saving real data is too expensive. Figure 3 presents an architecture for the entire Ethereum ecosystem on a network. The Ethereum Virtual Machine is mostly utilized for directing smart contracts, as well as establishing a consensus among all participants [6]. In the Ethereum ecosystem, the following play important roles: • Whisper: Ethereum has its own messaging protocol called Whisper. Whisper is a decentralized chat mechanism on the Ethereum platform which operates on a peer-to-peer protocol. Fig. 3 Ethereum ecosystem [6]
- 33. Discovering Diverse Content Through Random Scribd Documents
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