State of the Art in Blockchain Technology and IoT Systems

SOFIE researchers produced a report exploring the state of the art in Distributed Ledger Technology (DLT) and Internet-of-Things (IoT) systems. This reports sheds light at the current landscape of blockchains, with the intent of employing them to support trust and realize automatic operations in the Internet of Things through the use of smart contracts. For a brief overview of how SOFIE intends to use DLTs and interledger technologies for enabling secure, open IoT system interconnection please see the SOFIE DISS 2018 workshop paper, found here:
The Decentralized IoT Security and Standards workshop was held as part of Internet Society's 25th Network and Distributed System Security Symposium (NDSS) in San Diego, CA, USA.

Distributed Ledger Technologies provide an append-only, transparent database, where the full state history is immutable and visible to all. Trust in DLTs is supported in a distributed manner across a set of computers, rather than centrally through a single institution. Blockchains are the dominant type of distributed ledgers, where data records are grouped into blocks that are linked through cryptographic hashes, thus forming a chain of blocks.

The report identifies three elements as the driving force behind a blockchain's operation:
- The consensus mechanism, responsible for keeping all nodes in sync to a universally agreed state
- The programming language for building smart contracts
- The access policy, determining which nodes can participate in the blockchain’s distributed network and the roles that they can perform

Interledger approaches and mechanisms have been developed to connect different DLTs and payment networks because no one technology seems to prevail and new ones continue being successfully introduced. They differ in whether they provide support for trading value between two blockchains, in which case the total amount of value in each blockchain remains the same, or whether they support the transfer of value from one blockchain to another.

With respect to IoT platforms, a large number of them are proprietary and either fully or partially closed. There have been various attempts for defining or describing IoT architectures and systems using a layered and modular approach for facilitating interoperability. Some IoT systems have already adopted blockchain technology. These systems include both industrial IoT solutions and blockchain-community originating proposals that specifically target IoT data handling. SOFIE's report focuses in particular on how blockchains can support IoT data and transactions.

The report concludes with a discussion on privacy-related issues, especially those that arise when a large amount of data needs to be handled from different sources. Decentralized identity solutions are necessary for large distributed systems with key evaluation criteria being the trust model, the degree of interoperability, and their cost.

The entire SOFIE report on DLTs and IoT Systems can be found here: