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Internet of Things 10 (2020) 10 0 081

Contents lists available at ScienceDirect

Internet of Things

journal homepage: www.elsevier.com/locate/iot

Review article

Blockchain for the IoT and industrial IoT: A review

Qin Wang

a , b , c , ∗, Xinqi Zhu

c , d , Yiyang Ni e , Li Gu

c , d , Hongbo Zhu

a , b

a Jiangsu Key Laboratory of Wireless Communications, Nanjing University of Posts and Telecommunications, Nanjing, China b Engineering Research Center of Health Service System Based on Ubiquitous Wireless Networks, Nanjing University of Posts and

Telecommunications, Ministry of Education, China c College of Engineering and Computing Sciences, New York Institute of Technology – Nanjing Site, Nanjing, China d College of Overseas Education, Nanjing University of Posts and Telecommunications, Nanjing, China e School of mathematics and information technology, Jiangsu Second Normal University, Nanjing, China

a r t i c l e i n f o

Article history:

Received 1 March 2019

Revised 29 June 2019

Accepted 29 June 2019

Available online 12 July 2019

Keywords:

Blockchain

IoT

Industrial IoT

Decentralization

Security

a b s t r a c t

The Internet of Things (IoT), especially the industrial IoT (IIoT), has rapidly developed and

is receiving a lot of attention in academic areas and industry, but IoT privacy risks and

security vulnerabilities are emerging from lack of fundamental security technology. The

blockchain technique, due to its decentralization and information disclosure, was proposed

as a decentralized and distributed approach to guarantee security requirements and moti-

vate the development of the IoT and IIoT. In this paper, we first introduce the basic struc-

ture and main features of blockchain and summarize the security requirements to develop

IoT and Industry 4.0. Then, we explore how blockchain can be applied to the IoT for Indus-

try 4.0 using its security tools and technology. We describe the most relevant blockchain-

based IoT applications to promote the functions and advantages of the blockchain tech-

nique on IoT and IIoT platforms. Finally, some recommendations are proposed to guide

future blockchain researchers and developers.

© 2019 Elsevier B.V. All rights reserved.

1. Introduction

The advent of the Internet of Things (IoT) enhances traditional thinking of the past and allows connection of many, if not

all, objects in the environment to the network. It can connect vehicles, household appliances, and other electronic devices

together on the network, which, in turn, brings humans a more intelligent life. The system realizes real-time identification,

location, tracking, and monitoring, and it triggers corresponding events automatically. Furthermore, IoT is the crucial part

in the Industrial IoT (IIoT) that aims to produce intelligent manufacturing goods and establish smart factories with tight

connections between customers and business partners.

The IoT is experiencing exponential growth and receiving a lot of attention in academic areas and industry, but the

privacy risks and security vulnerabilities are emerging from the lack of fundamental security technology. Current secu-

rity and privacy methods are inapplicable for IoT due to its decentralized topology and the resource constraints of mobile

devices [1] .

To guarantee the security of the IoT and IIoT, blockchain is proposed as a decentralized and distributed approach. It is a

distributed ledger as all the blocks are chained together. It is able to track and coordinate transactions and save information

∗ Corresponding author at: Jiangsu Key Laboratory of Wireless Communications, Nanjing University of Posts and Telecommunications, address: No. 66

Xin Mofan Road, Nanjing 210 0 03, China.

E-mail addresses: [email protected] (Q. Wang), [email protected] (X. Zhu), [email protected] (Y. Ni), [email protected] (L. Gu), [email protected]

(H. Zhu).

https://doi.org/10.1016/j.iot.2019.10 0 081

2542-6605/© 2019 Elsevier B.V. All rights reserved.

2 Q. Wang, X. Zhu and Y. Ni et al. / Internet of Things 10 (2020) 10 0 081

for the billions of devices in the IoT [2] . The most important advantage of blockchain technology is decentralization, which

realizes peer-to-peer transactions based on decentralized credits in distributed systems. It uses motion time stamping, dis-

tributed consensus, data encryption, and economic incentives. It reduces cost, increases efficiency, and provides solutions to

the problem of insecure data storage in centralized organizations.

We are going to analyse the basics of blockchain and IoT, by conducting archival research. To study this problem, we ex-

plore the main features of blockchain, such as decentralization, smart contracts, asymmetric encryption, access management

[3] and others that can be taken on the IoT platform to promote its functions. And we conclude that blockchain would be

an ideal and suitable concept for developing the IoT and IIoT. However, there are still some problems to be solved.

This paper is structured as follows. In Section 2 , we focus on what a blockchain is and different attitudes from coun-

tries and companies towards blockchain technology. In Section 3 , we introduce the IoT and IIoT and analyse their develop-

ment disciplines and present issues. Then, we explore several blockchain based IoT and IIoT applications in Section 4 . Also,

the problems and limitations of blockchain are proposed in Section 5 . We draw conclusions and propose future work in

Section 6 .

2. What is blockchain?

We cannot discuss the blockchain without mentioning Bitcoin first. Blockchain technology made its public debut in 2008

when Satoshi Nakamoto released the whitepaper Bitcoin. Even today, many people still regard Bitcoin and blockchain as the

same thing. At its core, blockchain is a decentralized ledger that records transactions between two nodes in a permanent

way without authentication from a third-party. This creates an extremely efficient process and reduces the cost of transac-

tions below 1%. But Bitcoin is only one kind originating from the blockchain virtual currency. With blockchain development,

it could be used for more than cryptocurrency. People started to invest in and explore how blockchain could alter different

kinds of applications or operations. One of the most popular applications is to combine blockchain with the IoT.

2.1. Blockchain development

The blockchain technique is not a new concept, but it is recently developed with its specific advantages in guaranteeing

transaction security. In November 2008, a paper written by Satoshi Nakamoto was published online, titled “Bitcoin: A Peer-

to-Peer Electronic Cash System”. It described one electronic trading system that did not depend on any third party and was

quite different from the present ones. Then, in January 2009, bitcoin was created by Satoshi Nakamoto, with the first block

(Genesis block) that can be mined.

Because of the rise of Bitcoin, more and more different cryptocurrencies have been introduced. This has led to mone-

tary system chaos and the emergence of many opportunistic people making money through it. So cryptocurrency suffered

a blow, but most countries and companies attach more importance to blockchain technology. Some countries even refer

to blockchain technology at the national strategic level [4–11] . Many countries and companies have high expectations for

blockchain technology. Well-known companies, such as Alibaba, and Google, have also introduced related projects to study

blockchain, so in the future, the blockchain will be a very objective technology [12] .

We term from 2009–2013 blockchain 1.0, where bitcoin is a representative and people used blockchain in digital currency

applications. In the following two years, it was developed to blockchain 2.0, where smart contracts are combined with digital

currency to optimize a wider range of scenarios in financial areas. There were two typical applications during this period:

one is the bitcoin-based trading market, and the other is currency exchanges. The investments by venture capitalists in

blockchain start-ups rose from $93 million to $550 million in three years from 2013, according to [13] . It is forecast to

grow to $2.3 billion by 2021. Now, the blockchain has developed to the era of programmable blockchains aiming to provide

decentralized and distributed solutions for a variety of IoT and IIoT applications [14] .

2.2. Concept and structure of blockchain

Overall, blockchain is composed of three core parts: block, chain, and network:

1. Block: this can be thought of as a list of bills that cannot be modified. Once you record something into blocks, every

node can inquire everything in this block. The size, period and triggering events for blocks depend on the type of

blockchain.

2. Chain: this has the function of linking a list of blocks. Blockchain is founded on linking all the blocks.

3. Network: this is a set of nodes. In a traditional network, routes are thought of as nodes, whereas in a blockchain

network, the blocks are the nodes.

In detail, the structure of a blockchain can be seen in Fig. 1 . It shows the components of a block, the algorithms it uses,

and the relationship between blocks. One block can be divided into two parts including the header and body [15] . The block

header involves pre-block hash, a timestamp (indicating the writing time of the block data), Nonce (whose value is adjusted

by miners so that the hash of the block is larger than the hash of the next block), and the Merkle root (quickly summarizing

and verifying the existence and integrity of block data). The block body records the transaction information details and the

number of transactions.

Q. Wang, X. Zhu and Y. Ni et al. / Internet of Things 10 (2020) 10 0 081 3

Numbers of transactions

Hash transaction history

Previous block hash

Timestamps

Nonce

Block body

Block head

Merkle root

Numbers of transactions

Hash transaction history

Previous block hash

Timestamps

Nonce

Block body

Block head

Merkle root

Fig. 1. Structure of a blockchain.

Through the difficulty value of the Proof of Work (PoW) consensus process, the correct Nonce is found first, and the

miners who have been verified by all miners will receive the current block accounting rights. These records are generated

by the hash process of the Merkle root to count in the block header. When a new transaction happens, the information

is broadcast to the all network participants. All miners who have received the transaction will verify it by validating the

transaction signature. The miners order and pack the transactions into timestamp blocks. Then, they broadcast the blocks

back to the network. The network nodes verify that the blocks contain valid transactions and refer to the previous block of

the chain by deploying a kind of hash algorithm. The blocks that are not verified by nodes will be discarded. Therefore, a

blockchain provides a trusting strategy for information exchange or resource trading scenarios.

3. IoT and Industrial IoT

3.1. Introduction of the IoT and Industrial IoT

3.1.1. IoT

At the conceptual level, IoT refers to the interconnection and interoperability among our everyday devices (computers,

laptops, phones, watches, and other handheld embedded devices), as well as the device autonomy, perception, and situa-

tional awareness. A connected device equipped with sensors or actuators senses its surrounding environment, understands

what is happening and decides intelligently and independently or communicates with the other nodes or users to make the

best decisions. In short, IoT aims to add computer-based logic to plenty of things (objects), which can then be monitored or

controlled by analytics or engines [16] .

The development of the IoT is increasingly suited to the needs of humanity. It combines vehicles, healthcare, wearables,

retail, logistics, manufacturing, agriculture, utilities, appliances, etc. [2] . According to the 2020 conceptual framework, the

IoT is expressed as a simple formula [17] .

IoT = Services + Data + Networks + Sensors

Thus, IoT is a combination of data from sensors and networks that provide different intelligent services.

3.1.2. Industrial IoT

IIoT refers to the trend or concept of using process automation and data exchange in the current manufacturing indus-

try. It brings together applications of the IoT, network augmentation system and cloud computing [18] . The IIoT is used

together with Cyber-Physical Systems (CPS) for Industry 4.0 to digitize and understand the supply market, manufacturing,

and sales, and it finally achieves convenient, effective, and personalized products [19,20] . CPS are mechanisms monitored

or controlled by computer-based algorithms that are tightly integrated with users and the network, such as autonomous

automobile systems, smart homes, medical monitoring, and robotics systems.

IIoT is a fusion of many new technologies, such as autonomous machines, advanced robotics, big data, cloud/edge com-

puting, digital ubiquity, smart factories, machine learning, AI, and cyber physical on the basis of IoT [21] .

IIoT mainly applies instrumentation, connected sensors, and other devices to machinery, vehicles in the transport, and

the energy and industrial sectors. Traditional IoT applications such as Internet-connected refrigerators are a subset of IIoT

[22] . It has four design principles [18] :

4 Q. Wang, X. Zhu and Y. Ni et al. / Internet of Things 10 (2020) 10 0 081

Fig. 2. Blockchain applications in the IoT and IIoT.

1. Interoperability: the possibility that machines and related components connect and communicate with people.

2. Information transparency: the necessity of creating virtual copies of the physical world.

3. Technical assistance: essential comprehensive aggregation and information visualization to support human

capabilities.

4. Decentralization of decisions: the ability of a network-enabled system to independently make decisions and perform

its own specialized functions.

The IIoT based on the IoT provides a seamless way for data transmission across different workplaces. Real-time monitor-

ing systems and data transfer have the ability to optimize and increase productivity, get better quality products, and help

businesses become more intelligent and efficient [20,23] .

3.2. Issues that need to be resolved

However, for the IoT and IIoT to be developed rapidly, there are still some technical issues to solve, such as interoper-

ability difficulty, security vulnerability, lack of data analysis and transmission and absence of IT and OT convergence. One of

the biggest problems to be solved is security vulnerability.

As manufacturing processes become more intelligent, most connected computing devices in the information network

share information directly with the cloud and are therefore subject to security threats and attacks easily. This threat can

take many forms, as IoT devices have proven to be more likely to contain easily exploitable vulnerabilities, such as the

growing number of cybercriminal targets to expand their botnets. IoT-based Distributed Denial of Service (DDoS) attacks

have shown their power to undermine business [24] .

Blockchain is an ideal solution for IIoT security. The work in [25,26] proposed a blockchain platform for IIoT. This plat-

form, with smart contracts deployed, enables development of different distributed applications for manufacturing using a

decentralized, trustless, peer-to-peer network for IIoT applications.

4. Future human industrial development direction: blockchain-based IoT and IIoT

The blockchain is a real-time ledger of records that are stored in a distributed, point-to-point manner and are indepen-

dent of any central authority. Each record is encrypted and time stamped, and users can only have the rights to access and

edit the blocks for which they have the private key. Each block is linked to the previous and the next block, and the entire

chain is updated each time a change is made [27,28] . It is extremely difficult or impossible to edit or delete data blocks

when the blocks are recorded on the blockchain ledger. Thus, it protects communication and transaction security.

Since blockchain has so many innovative features, it has been and will be widely used to develop IoT and IIoT. Some

representative blockchain applications are summarized in Fig. 2 and introduced in the following subsections.

4.1. Electric vehicle clouds and edge (EVCE)

EVCE is an attractive network paradigm to aggregate the destroyed idle resource of vehicles to a common pool. The

coexistence of hybrid cloud and edge computing is centreless in which information exchange is done without pre-assigned

Q. Wang, X. Zhu and Y. Ni et al. / Internet of Things 10 (2020) 10 0 081 5

trust relationships. To address security issues, the blockchain technique is proposed as a potential solution with features of

decentralization, anonymity, trust, and co-participation [29,30] .

In an EVCE computing network, both energy resources and information are exchanged, collaborated, and reallocated

among vehicles. The vehicles can be spontaneous network operators, mobile data calculators, or virtual power plants in

different cases as needed. In [29] , a security scheme was built by blockchain to establish distributed consensus via data coins

and energy coins based on timestamps and hash tree algorithms such as PoW and proof of stake (PoS). The information and

energy trading records among vehicles were encrypted and structured into blockchains in a linear chronological order so

that the transaction information could not be tampered with easily.

To satisfy the ever-increasing energy resource demands of IIoT applications with growing numbers of devices, a localized

blockchain-enabled secure energy trading system among vehicles was built in [31] and [32] . The authors proposed a consor-

tium blockchain to perform consensus processes among vehicles. It enables distributed charging and discharging transaction

security and privacy without a trusted third party.

4.2. Mobile commerce

Due to the boom of mobile commerce (m-commerce), data security problems are becoming more and more important

and need to be addressed. Blockchain as a distributed database was proposed to secure transactions at mobile nodes to

support direct device-to-device m-commerce data exchange and sharing. An Android system-based implementation process

was introduced in [33] . Blockchain makes sure that the data exchange between devices does not need the involvement

of any third party. The work in [34] introduced how smart contracts radically and transparently redefine the interactions

between interacting parties on a distributed network. A smart contract is first built between the seller and buyer containing

the exact transaction information [35] . Both participants confirm this contract and publish it in the blockchain system. As a

result, both get what they want securely with the help of the blockchain.

4.3. Trace food source

Trace food source is the biggest application for blockchain to help improve the IoT. The traditional food chain starts from

manufacturers, through suppliers, to vendors, and this makes food information very confusing and increases the difficulty

of tracing food sources.

Blockchain makes sure that each transaction is time-stamped and digitally signed and can be traced back to a specific

time period, and the corresponding party is found on the blockchain by the public address. This is because of the non-

repudiation of the blockchain: ensuring that someone cannot verify the authenticity of his or her signature on the file, or

that the author’s identity is the transaction they initiated, making the system more reliable. The conversion of ledger global

status and the blockchain auditing function provide a company with security and transparency for each iteration [36,37] .

Blockchain ensures the security of the supply chain and can be convenient for handling crisis situations, for example,

product recalls because of security breaches. The public availability of blockchains means that each product can be traced to

the source of raw materials, and the transactions can be linked in a chain to users identifying vulnerable IoT devices [27] .

Now, IBM and Walmart work together to make the food chain transparent. They signed an agreement with Tsinghua

University to generate transparency and efficiency in supply chain record-keeping. Tsinghua University is also working with

Yonghui Superstores to record the fish supply chain in the store. Instead of traditional paper tracking and manual inspection

systems, blockchain provides a different transaction system. Retailers can know who the suppliers trade with. Since transac-

tions are not stored in any single node, it is almost impossible to modify information easily. At the same time, it is easy for

consumers to access relevant information about goods such as factory and processing data, production and expiration time

by scanning the QR code using a smartphone, and they can get service in the event of product failure. The government can

check the blockchains regulating relevant food departments [38] .

Without blockchain, it usually took 6 days, 18 h and 26 min for Walmart to trace mangoes back to the original farm.

Now, with the help of blockchain, consumers need just 2.2 s t

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