2
BLOCKCHAIN OVERVIEW
AND IoT CHALLENGES
2.1
Overview of Blockchain
The roots of blockchain technology were established
in the late 1980s and early 1990s (Lamport, 2019). To
prove that nothing had been changed in the collection
of signed copies, a signed data chain was employed
in 1991 as an electronic ledger for digitally signing
documents (Narayanan et al., 2016). Bitcoin is only
one of many blockchain-based inventions now under
development. Before Bitcoin, other, less well-known
electronic payment systems existed. Because no
single user could control the virtual currency and
there was no single point of failure, the distribution of
a blockchain-enabled Bitcoin increased its utility. As
a result, direct user-to-user transactions without the
involvement of third parties were made possible. The
Bitcoin Blockchain allows users to maintain their
anonymity, but even if users’ identities are concealed,
all transactions and account IDs are still viewable to
the general public. In the absence of authorized
intermediaries, the four fundamental characteristics
of blockchain technology outlined below foster the
necessary confidence within a blockchain network:
Ledger:
The system keeps a complete record of all
transactions in an append-only ledger.
Secure:
The ability to rely on blockchain technology to
safely store and verify data is ensured by sophisti
cated
cryptography.
Distributed:
Participants on the blockchain network are
transparent to each other because the ledger is
distributed among them.
Decentralized: A decentralized ledger grows the
number of nodes and makes a blockchain network
more
resistant to malicious attacks.
2.2
Categorization of Blockchain
Depending on the permission system used to
determine who is allowed to maintain a blockchain
network, several categories may be identified. Its four
classifications are a public, private, consortium, and
hybrid blockchain topology.
Publicly controlled blockchains are open,
unconstrained, and available to all users. The majority
of bitcoin trading and mining now takes place on
public blockchains. Blockchains that have
permissions owned by a single entity are called
private blockchains. They are only partially
decentralized because the general public can only use
them to a limited extent.
A consortium blockchain is a permissioned
blockchain maintained by multiple organizations
rather than a single organization.
Hybrid blockchains are ledgers controlled by one
organization but accessible to public blockchain
inspection, which is required to verify some
transactions.
2.3
Pillars of Blockchain
Blockchain technology is built upon four pillars:
Cryptography: Cryptography is a vital part of
blockchain security. A blockchain encrypts data
before transferring it to a destination using
cryptography, which utilizes symmetric and
asymmetric keys and hash functions (Bosamia and
Patel, 2020).
Distributed Ledger: It is widely available, shared,
and synchronized by agreement across many
locations. The distributed ledger is decentralized and
keeps track of every contract and transaction between
various parties and sites (Bosamia and Patel, 2020).
Smart Contracts: Smart contracts are blockchain-
stored computer programs that only launch when
specific requirements are satisfied. They are used to
automate contract execution and guarantee that
everyone is notified of the conclusion as quickly as
feasible (Salimitari et al., 2020).
Consensus Algorithms: The blockchain network’s
nodes reach a consensus on the distributed ledger’s
current state using a consensus algorithm. The
primary motivation of the publishing node is
unquestionably financial gain, not a concern for the
welfare of other publishing nodes or the network.
2.4
Classification of Blockchain
Consensus Algorithms
Depending on the working mechanism, blockchain
consensus algorithms are classified into two
categories: Proof-Based and Voting-Based, which is
shown in Figure 1. Further, the Voting-Based
algorithms are divided into two classes: Crash Fault
Tolerant and Byzantine Fault Tolerant. Among these
two, PBFT (Practical Byzantine Fault Tolerance
Consensus Algorithm) and RAFT (It is not quite an
acronym but named after Reliable, Replicated,
Redundant, And Fault-Tolerant) are proven suitable
for the Internet of Things. Since all IoT networks
desire high throughput, low latency, and minimal
computational overhead, the PBFT and RAFT are
preferred among most consensus algorithms. They
can operate normally even when more than one-third
of all nodes engage in malicious behavior.