BID: Blockchaining for IoT Devices
Matthew Frederick Chetan Jaiswal
Computer Science Department
Truman State University
Kirksville, United States
mdf6745@truman.edu
Abstract—The growth of technology has brought upon a slew
of devices that have the ability to connect to the internet. This has
led to much more opportunistic and easier ways to perform tasks
but it also opens the doors for new attacks. Blockchaining is a
new technology that was introduced with the creation of Bitcoin
in 2008. Blockchaining has mostly been implemented in the field
of cryptocurrency but there are many other useful applications
of blockchaining. It allows for a decentralized ledger of data that
can securely keep a network honest and prevent from possible
attacks. Blockchains are based on a consensus algorithm and the
proof of stake algorithm bases consensus between nodes based
on the stake that the nodes have in the system.
Index Terms—Internet of Things, Blockchain, Proof of Stake,
Network Security, Consensus Algorithm, 50% Attack, Nothing
at Stake Attack
I. I NTRODUCTION
Since 2012, the number of connected devices to the internet
has increased from 15.41 billion to 20.35 billion in 2017.
Additionally that number is expected to exponentially increase
to 75.44 billion by 2025 [1]. The Internet of Things (IoT) is
made up of all devices that are connected to the internet and
that have the ability to send data to one another. Devices on
the IoT can range from kitchen appliances to vehicles and the
growing number of connected devices leaves the IoT more
vulnerable to attack than ever.
Fig. 1. Number of Connected Devices in Billions [1]
978-1-5386-7693-6/18/$31.00 ©2018 IEEE
Computer Science Department
Truman State University
Kirksville, United States
cjaiswal@truman.edu
The vulnerabilities in the IoT stem mostly from the het-
erogeneous nature of devices that communicate. Devices on
the IoT have multiple different functions and the amount of
computing power that each device has varies. This makes it
tough to find a common security protocol that could be applied
to all devices. Blockchaining could solve the problems with
securing IoT devices.
IoT is a growing industry for people all around the world.
The increase of smart devices and appliances has led to a
dramatic increase in connected devices, as shown in Fig 1. IoT
has amazing potential to bring a slew of devices together and
allow them to communicate. All of these devices are linked in
some way through the internet. The problem is that each device
could have several differences that make security protocols
hard to develop for IoT and therefore there are many exploits
that exist.
Our proposal is to use blockchains to secure the IoT
network. We call our system BID (Blockchaining for IoT
devices) and it uses a Proof of Stake (PoS) algorithm in order
to achieve security. The decentralized nature of a blockchain is
perfect to keep attackers at bay. The immutability of the blocks
also allows for a permanent ledger to track all transactions that
have been made. The use of Public and Private keys also allows
for a secure way to keep information private. Also using smart
appliances as stake in the system means that it can only have
one owner. This makes it tough for attackers to gain control
of the devices since transferring devices will be difficult.
The remainder of the paper is as follows: section II will
discuss our motivation, section III will discuss the key com-
ponents to the system and briefly explain what each part is,
section IV explains the methodology to the development of
the blockchain, section V will review literature related to our
research, section VI will provide an analysis and evaluation
of the efficiency of our system, and section VII will state our
conclusion and guidelines for future work.
II. M OTIVATION
The rise of the technological age has made people and their
information more vulnerable than ever. An attack on a person
or their identity could come at any time. With the increase in
the amount of connected devices, the number of attacks also
increases. In [2], the authors describe the four layers of IoT
and how each one is vulnerable with solutions to solve these
vulnerabilities. Technology is also becoming more complex as
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time goes on. This can be overwhelming for someone who is
not as used to technology and thus it may lead to downloading
malicious content [3]. This paper focuses on all four layers of
IoT and how blockchaining can be use to create a secure,
decentralized system to handle it all.
III. C ORE C OMPONENTS OF B LOCKCHAINING
Blockchaining was first introduced with the creation of
Bitcoin back in 2008. It is used to create a decentralized
system in order to keep data more secure. A blockchain uses
public and private keys in order to verify transactions that form
a block. A block is made up of a hash, several transactions
and the hash of the previous block, and a nonce. Blockchains
use the 256 bit secure hashing algorithm (SHA-256) [4] hash
algorithm in order to create hashes based on the data that
is contained within that blockchain. Transactions are objects
that have several different properties that include sender key,
receiver key, time stamp, and signature. The blockchain also
uses a consensus algorithm that verifies the validity of a
blockchain. The following sections will further explain the
elements of a block on a blockchain.
A. Hashes and Previous Hashes
The blockchain hashing function uses SHA-256 algorithm
in order to create hashes for the blocks on the chain. The 256
symbolizes the amount of bits that the algorithm produces for
the hash [3]. Hashing is beneficial to the blockchain because
it can make for searching for a block much quicker and easier.
The hashes are unique to each block by incorporating a nonce
into the hashing algorithm.
The hashes of the previous block of the blockchain are
stored in each block. This makes it so that the blockchain
is always in consecutive order of which the blocks have
been pushed to the blockchain. This also protects from replay
attacks. Replay attacks are when valid data transmissions are
replayed or delayed in order to be used for malicious intent
[5]. The hash and previous hash in combination with the nonce
makes it so that blocks cannot be repeated.
B. Nonce
The nonce is a number that is only ever used once in a
system. The nonce helps the hashing algorithm create unique
hashes for all of the blocks on the blockchain. This is done
by adding a number only never seen before in the system.
That allows blocks with the same types of transactions to have
different hashes. Though it is fairly uncommon, it is possible
to have two blocks with the exact same transaction history.
The nonce adds to that by making the SHA-256 algorithm
less likely to calculate similar hashes.
C. Transactions
Transactions are the single-most important part of the
blockchain. Transactions are what takes up most of the mem-
ory space in a block. Transactions can have as many properties
as needed but the minimum that they contain are sender key,
receiver key, timestamp, and signature. For the IoT, the sender
key would be the user and the receiver key would be the public
key designated to a device. A transaction in the IoT system
will consist of all of the minimal properties in addition to
a “value” that will dictate an action that will be performed
with the respective device. The user key, or sender key, on
the transaction would be the public key of the user accessing
the device while the device key, or receiver key, would be the
public key of the device that is being accessed. The signature
would be the private key of the user to verify that it is a valid
transaction.
D. Consensus Algorithm
The way that blockchain stays safe and decentralized is
that a copy of the blockchain is kept on each user’s device
on the network. The blockchain stays consistent by using
what is called a consensus algorithm. The consensus algorithm
that the Bitcoin blockchain uses is the Proof of Work (PoW)
algorithm. This algorithm uses computing power to solve
complex equations in order to push blocks to the blockchain.
This makes it so that attacks become expensive and it is not
so easy to push fake blocks to the blockchain. Unfortunately,
thanks to the IoT’s lack of computational power in some
devices, the PoW algorithm is not ideal.
An algorithm that would be ideal for working with IoT is the
PoS algorithm. This algorithm makes it easier to push blocks
onto the blockchain if you have more stake in the system. An
example of a stake would be the number of devices that you
have connected to the blockchain. The system would give you
a value based upon the number of devices that you own and
have connected to the network [6] This stake in the system
proves that someone is a legitimate user and they have spent
time and money into the system.
Both the PoW algorithm and the PoS algorithm are sus-
ceptible to 51% attacks. This attack happens when one user
or group of users has at least 51% computing power or
stake in the system. The PoW is more prone to this type of
attack because it is easier to access more computing power
rather than get more stake in the system. User’s stake is kept
consistent in this system because it is not common for devices
to be transferred between two people and this system would
not allow it.
The PoS algorithm has some added vulnerabilities with it.
The two included vulnerabilities are the grinding attack and
the nothing at stake attack [6]. In section VI, we will discuss
these attacks further and how the system is set up to protect
from these added vulnerabilities.
IV. M ETHODOLOGY
This section describes the core components of BID that
make up the middleware which uses blockchains to secure the
IoT. A personal system (PS), also referred to as a node, is a
personal network that includes a master computer (MC), smart
devices, and smart appliances. In our model, PS means a users
personal computer, the MC, and the users smart devices and
smart appliances. A network refers to the connected personal
systems that use the blockchain.
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A. Network Structure
The main quality of a blockchain that makes it secure is
that it is decentralized.
Fig. 2. Structure of a Decentralized Network
Being decentralized means that there is no controlling party
and each node interacts with one another as shown in Fig 2.
This method allows each node to interact with one another,
whether it be directly or indirectly. For example, let’s say that
PS6 has been selected as the leader node and is in charge
of mining the next block for the rest of the network. The
blockchain is validated by comparing the blocks and their
hashes to the connected nodes.
In BID, the decentralized system, like the one in Fig 2,
would have the personal systems representing a persons own
forger and their owned devices. The forger is a computer
which users have chosen as the owner of all of the devices.
The personal systems are then all connected to each other
by contributing to the blockchain. Other personal systems,
however, cannot see what type of devices you own and cannot
see the types of transactions that a user has been making.
If the blockchain on the leader node is different from all
of the other nodes, then it is flagged as a possibly malicious
node and that node “loses” stake in the system. No devices
are actually removed from the system but the stake value of
this node is decreased in order to keep it from becoming the
leader node again.
If the blockchain is the exact same as the blockchain on
other nodes, then the node is marked as a valid node. This
allows the node to push their block of transactions to the
network’s blockchain. This new blockchain is then sent out
to each node on the blockchain and that block is added to
their blockchain, thus creating a new blockchain.
To keep the network truly decentralized, stake value will
be awarded to the nodes that did not participate as the leader.
This makes the probability higher for the system to select a
different node to be the next node leader. However, the node
leader will not get an increased stake value of zero but rather
will get less stake value than nonparticipating nodes. This way,
every node is awarded an “age price.” Age price will prioritize
users that have been using the network for longer periods.
B. Personal System
There are three main components in a personal system
and those are the master computer, smart devices and smart
appliances. MCs are usually a rooted system such as a desktop
computer but could also be applied to a laptop. Smart devices
include devices such as an iPhone, an android phone, an
iPad or any other tablet, etc. Smart appliances (SAs) could
be any other device that is connected to the internet. These
include smart fridges, security cameras, factory equipment,
lights, locks, etc.
Fig. 3. Structure of a Personal System
The MC acts as an owner of both smart devices and SAs
as shown in Fig 3. The MC owns all of the SAs and smart
devices as stake in the system, similar to that of a slave and
master relationship. The slave and master relationship allows
the MC to control the The difference between smart devices
and SAs is that smart devices can access and modify SAs and
they are not always tethered to the same place. SAs never
move out of the system they are created on unless they are
removed as stake.
MCs will consist of several components including a trans-
action list, a device key list, and an access list. The transaction
list contains the transactions that have been processed in the
PS. This is a way to keep track of which devices are accessing
and modifying other devices on the PS. The device key list has
the public and private keys of all the devices that are owned by
the user. This list will assist in keeping record of what devices
are present in a PS and prove that certain devices belong to
that user.
The access list is the list of smart devices and what they
are allowed to access. For example, in Fig 3 Smart Device
1 can access SA1, SA2, and SA4 while Smart Device 2 can
only access SA5, and SA6. It is possible that a smart device
can access all appliances in a system but the ownership is not
transferred to the smart device. The smart device is only given
an allowance to use the specified SAs.
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C. Blocks
Blocks are the single most important part of the blockchain
because they store all of the valuable information as transac-
tions. The transactions are stored in a list called the transaction
list.
Fig. 4. Structure of a block and a transaction list
The structure of a block and a transaction list is shown in
Fig 4. The block is made up of four separate components that
are the hash, the nonce, a transaction list, and the previous
hash. The block will also have an “owner” attribute but that
attribute will be hidden from contributors. The reason for the
owner attribute is to allow people to view the blocks that they
have contributed. The hash is calculated by using the SHA256
algorithm previously explained in section III-A. This hash is
unique to the block and that is how the block can be identified.
We also thought about the idea of having a hashing list on the
MC in order to find the blocks that have been forged by that
MC. This would allow the MC to view all transactions that
it has contributed to the blockchain but we found it would
be easier to add a separate, private transaction list, that works
similar to a blockchain. This would allow for a much quicker
access to the list of transactions for a PS.
D. Proof of Stake Implementation
Our system uses a modified version of the PoS algorithm.
Most blockchains have cryptocurrency that they use in order
to contribute blocks. In this structure, the “cryptocurrency”
that this blockchain uses is a combination of smart devices
and smart appliances. A person is awarded a value for the
amount of smart appliances and smart devices on their PS.
Each person will start with a value of one for adding their
MC to their PS. As their amount of devices increase, so does
their stake in the system. The algorithm used by this structure
will also implement a time-based formula to add value to a
user. This prioritizes users that have been using the system
longer and are deemed more trustworthy to add valid blocks.
What the users need to be prioritized for is to be elected for
the leader node of the network. The leader node is the node
that forges the next block on the chain. This node is selected
in a semi-random process using an algorithm based on stake
in the network, age of the stake, and penalties that the PS
has accrued. When someone adds a device to their PS, then
they get more value on the network which makes them more
reliable because of the stake that they have in the network.
Our implementation works as follows. A user will access
a smart device in their home and that will be recorded as a
transaction and added to the local transaction list. Once the
local transaction list is full it will then be created into a block
and will be forged on the blockchain. Each block will also
have an “owner” associated with it as described in section
IV-C. According to [8], Bitcoin uses a maximum block size
of 1 MB which limits the transaction rate to between 3 and
7 seconds. If this were to be implemented in our system, that
would allow for a new chain leader to be selected roughly
every ten minutes. That would allow for a person to forge
multiple blocks in a day. The blocks would then be pushed
to the blockchain and the connected nodes would come to a
consensus that these blocks come from a trusted source.
The biggest difference between a normal PoS algorithm
and this IoT implementation of a PoS is that the coins, or
appliances in this case, are given private keys and are non
transferable. This, in a way, gives the appliances an identity
and allows the user to view each of their coins’ properties.
This also allows the user to dictate which devices have access
to each other and what kind of modifications they can make.
V. L ITERATURE R EVIEW
In this section, we discuss previous works that include using
blockchaining for IoT and the PoS algorithm.
Using blockchaining to secure the IoT is relatively new
but it has increased in popularity over the years. In [9], they
discuss a blockchain structure that includes a smart home
miner, local storage and group of devices along with overlay.
This system adopted many similar components of their system
such as attributes of the transaction, and using local storage in
order to store transactions. The difference between our system
and theirs is that BID is more decentralized. They use service
providers (SP) to provide an overlay to supply a copy of the
blockchain but our system does not take into account SPs at
all.
Other works, such as [10] and [11], discuss more about the
PoS algorithm. In [10], they discuss an upcoming technology
known as Ouroboros. Ouroboros is one of the first blockchain
protocols that uses proof of stake. They also prove how secure
Ouroboros is using the PoS algorithm and many aspects of it
can be applied to our system as well. The difference in their
system is that the leader is elected for a time slot to forge a
block on the blockchain.
In [11], the authors talk about the energy consumption of a
couple of proof of work (PoW) systems and how PoS is much
more energy efficient. They first introduce the blockchain and
then go into detail of PoW systems and PoS systems. The work
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 TABLE I
F EATURES
Confidentiality Integrity Availability
BID x x x blockchain on the MC. This would allow for a user to always
Case Study of Smart Home x x x
Ouroboros x x x be able to access the transactions that have been made with
also evaluates whether PoS is efficient in achieving consensus.
The article mainly discusses cryptocurrency but the logic can
still be applied to a general PoS algorithm. The main difficulty
that is presented is the nothing at stake attack and that will be
further discussed in section VI.
There have been many concerns with protecting users data
in a smart home environment, as shown in [12]. Their proposed
model uses a data collector and receiver. The collector collects
the data from all of the sensors in a smart home while
the receiver receives the data and then sorts it based on an
predetermined attribute. Our system works in a similar way but
it uses cryptographic keys in order to keep track of transactions
and devices.
VI. E VALUATION AND A NALYSIS
The system evaluation is based on the confidentiality, in-
tegrity, and availability (CIA) model that is used for the basis
of computer security. Confidentiality refers to the ability of the
system to only share data with authorized users, integrity is
only allowing authorized user to change data, and availability
is when authorized users can access their data at all times
[13]. Another analysis of our model is how well it prevents
common attacks on PoS systems, such as the ones mentioned
in section III-D. The following sub-sections will go in depth
of our analysis. As shown in Table I, BID, the case study of
the smart home, and Ouroboros all demonstrate confidentiality,
integrity and availability. As shown in Table II, the case study
of the smart home and ouroboros lack some of the protections
from attacks that BID offers.
A. Confidentiality
Confidentiality refers to only authorized users being able
to access data. Our system satisfies confidentiality by using
the devices as stake in the system. This allows for a device
to only be owned by one person; through the use of private
keys, those devices can only be accessed by the users MC or
by and smart device that has access to it. Private keys will be
stored in a wallet system and can only be accessed by the user
that owns the wallet. The signature of the user is also a way
to gain confidentiality in a system.
B. Integrity
Integrity is only allowing authorized users to change their
data. This is achieved in our system through the sue of
signatures. Like cryptocurrency transactions, all transactions
will have a signature of the user’s private key. This allows the
system to authorize that the transaction is valid. This signature
is a key part in validating transactions and making sure that
unauthorized users cannot gain access to certain devices.
C. Availability
Availability is how often and how easily the user has access
to their data. This is achieved by keeping a copy of the
their devices. As a backup, a separate data structure, different
to a blockchain, will also be kept on the MC. This data
structure is different from a blockchain as it is essentially
a normal linked list. This is because the user is the only
contributor. This would make it easier for a user to see their
data without having to look through the blockchain.
TABLE II
F EATURES
51% Nothing-at-Stake Grinding
BID x x x
Case Study of the Smart Home x
Ouroboros x
D. 51% Attack
The 51% attack [12] is a theoretical attack that is described
as controlling over 50% of a system. For example, in our
system that would mean owning 51% of the stake in the
system. In the example of Bitcoin, it would refer to owning at
least 51% of the computing power. This is one of the major
vulnerabilities of blockchains, but it is difficult to achieve. It
is tougher to achieve in a PoS system compared to a PoW
system. This is because of the difficulty to achieve more than
half of the stake in a system. A PoS system is more vulnerable
when it is first created but as more stake is created, then it
becomes harder to achieve this attack.
In [12], the authors go into detail of an example of a 51%
attack on a proof of work system. They propose it is viable if
there are two blockchains with a common ancestor. This would
create a separate blockchain that could potentially be valid if
it becomes long enough. This would require a tremendous
amount of computing power because a user would have to
have enough power to mine blocks faster than the rest of the
network.
Our system is protected from a 51% attack by assigning new
block leaders in order to forge the next block in the chain.
After a leader forges a block, a part of their stake will be
decreased in order to increase the chances of choosing a new
chain leader. Our system also protects from the 51% attack
by making it difficult for stake to be transferred from system
to system. This is because IoT devices are rarely transferred
between people. If this is the case, the user must delete that
device from their PS and then the new owner will have to add
the device to their system.
E. Grinding Attack
A grinding attack is an added vulnerability from using a
PoS system rather than a PoW system. A grinding attack is
when an attacker will try to create multiple iterations to find
a scenario in which they are awarded to be the leader. This
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attack would allow a user to continue adding blocks while
others would not be able to push their blocks. The incentive
behind this attack is so to gain more currency [15].
Our system prevents grinding attacks in two ways. One is by
giving no incentive to a user to use this attack. The whole point
of the grinding attack is to gain more coin which will give a
user more stake in the system. Our system does not reward
users for becoming the block leader so it is a waste of time to
use this attack. The other way our system prevents grinding
attacks is actually by taking stake away from the leader. This
would mean that if someone was chosen to be block leader
multiple times, then they would lose most of their stake in the
system. For example, if our system took 20% stake to be a
leader of the blockchain then a person who was leader three
times in a row would lose 100(.8)3 = 51.2 of their original
stake. They would be losing almost half of their stake with
just three blocks.
F. Nothing at Stake Attack
A nothing at stake attack is when there is a “fork” in
the blockchain and there are two valid blocks that have
been created. Then you are allowed to create two separate
blocks and add transactions to each block with no penalty.
This would allow for a person to gain currency through two
separate blocks or to prioritize a block depending on how
much currency they would receive [16]. Our system prevents
this in a few ways. The first protection from this attack is
through the use of a leader to create the next block on the
blockchain. This allows for only one user to push a block
of transactions at a time. The second method to stopping this
attack is through taking a part of their stake in the system when
they push a block. This would cost a person multiple stakes if
they were to push two separate blocks onto the blockchain to
create a fork. The final way that we protect from the attack is
by offering nothing as reward to create a block. This gives no
incentive to a person to create a fork on purpose and therefore
dwindle the amount of nothing at stake attacks.
VII. C ONCLUSION AND F UTURE W ORK
In this paper we have proposed a scheme called BID that
uses blockchaining to secure IoT devices. We use a novel Proof
of Stake algorithm in order to come to a consensus between
users and keep the blockchain accurate. BID is secure because
of the decentralized nature; this means that there is not a
single person in control of the system. Blockchain’s use of
cryptographic keys allows for the privacy of the user to be
secured.
In the future, the system would continue to use a PoS
algorithm but it would be an adapting algorithm. This would
allow for the system to prevent future possible attacks that
arise. The system would also use a checkpointing system if
anybody were to decide to leave the blockchain. This prevents
from history attacks as described in [15]. History attacks are
when an attacker will use retired private keys of old users in
order to gain more stake in the system. This would sway the
system and make them more likely to become the chain leader.
Currently, there are three separate objects that make up BID
and those are the personal systems, smart devices, and smart
appliances. Another feature that would be added is creating
objects for certain types of IoT devices that extend the smart
appliances object. This would allow for unique attributes to
be added for each device.
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