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12
Achieving Security and Privacy in NG-IoT
using Blockchain Techniques
Vasiliki Kelli1, Anna Triantafyllou1, Panagiotis
Radoglou-Grammatikis1, Thomas Lagkas2, Vasileios Vitsas2, Panagiotis
Fouliras3, Igor Kotsiuba4, and Panagiotis Sarigiannidis1
1University of Western Macedonia, Greece
2International Hellenic University, Greece
3University of Macedonia, Greece
4iSolutions Labs, Ukraine
E-mail: vkelly@uowm.gr; atriantafyllou@uowm.gr; pradoglou@uowm.gr;
tlagkas@cs.ihu.gr; vitsas@it.teithe.gr; pfoul@uom.gr;
igor.kotsiuba@isolutions.com.ua; psarigiannidis@uowm.gr
Abstract
The centralization of data is a current practice in information systems that do
not fit into the novel next-generation computing concept. Such a paradigm
aims to support the distribution of information, processing, and computing
power. Blockchain is a technology supporting the recording of informa-
tion for distributed and decentralized, peer-to-peer applications, which has
emerged in the last decade, with the initial focus being on the finance sector.
A highly valuable feature of blockchain is its capability of enhancing the
security of data due to the immutability of the information stored on the
ledger. In this chapter, the definition, details, applications, and benefits of
this technology will be explored. In addition, the ways in which blockchain
increases security and privacy will be described. Finally, the pairing of
blockchain with other next-generation, cutting-edge technologies will be
investigated.
Keywords: Blockchain, security, privacy, peer-to-peer.
251 DOI: 10.1201/9781032632407-15
This chapter has been made available under a CC-BY-NC 4.0 license
252 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
12.1 Introduction – What Is Blockchain?
Technology has become an aspect of daily life for most of the world’s
population. Intelligent devices able to capture, gather, process, and distribute
information have become a necessity for an ever-increasing number of
domains, ranging from the simplistic use of smart home gadgets to the highly
critical medical sector. Intelligent devices have become such an integral part
of contemporary society, which each human is estimated to own 9.3 devices,
by the year of 2025 [1]. Such a massive number of data-driven devices is
expected to significantly increase the volume of data to be processed and
stored. After all, Internet of Things (IoT) contributed to the creation of the
concept of Big Data, which is defined as highly variable data, produced at
high velocity, and is arriving in big volumes. Next-generation IoT (NG-IoT)
is a novel concept in computing, aiming to extend IoT in a human-centric,
distributed manner. As such, objects, services, and technologies offered to
the end-users are combined to achieve optimal end-user satisfaction, while
the processing of data occurs in the edge, closer to the user, yielding faster
response times.
Contemporary information systems mostly focus on processing and stor-
ing data in a central manner. This means that data travels from each data
source to a central entity for further management. However, this task is
becoming increasingly difficult due to the high volume and variety of the
produced information; as such, the effective storage and rapid analysis of data
becomes the main concern. In addition, centralization is often associated with
security and privacy issues, due to data traveling through unsecure channels to
the central entity, or due to the single-point-of-failure problem, which dictates
that the entire process will fail, if the central entity’s operation is disrupted.
The issues described in the paragraphs above have contributed to a current
effort to shift from the use of the concept of centralization in IoT to the
concept of decentralization. Consequently, information, processing, and other
aspects are distributed across devices, recanting the single-point-of-failure
problem. The significance of the shift toward decentralization has become
prominent due to the rise of the NG-IoT concept in computing, where instead
of relying on cloud solutions for data processing, all management occurs in
various distributed edge nodes, closer to the end-user.
Blockchain is the technology mostly associated with decentralization
and thus plays a key role in the NG-IoT concept. Although this technology
became well-known through the launch of the first digital cryptocurrency,
Bitcoin, in 2009, the idea was initially described by a person under the
12.1 Introduction – What Is Blockchain? 253
Figure 12.1 Centralized systems (left) and decentralized systems (right).
pseudonym “Satoshi Nakamoto” in 2008 [12], [13]. The concept behind
blockchain states that it serves as a system to record information, in an
immutable manner. This information is duplicated, and every participant
in the blockchain network owns a copy of it. In particular, a blockchain
is a digital ledger of transactions cryptographically signed and grouped
into blocks. Each new block is cryptographically linked to the previous
one, while it undergoes validation through a consensus decision by the
network’s members, in order to be added to the blockchain [2]. Due to
blockchain’s function of distributing copies of the data on the chain across
the network, conflicts regarding data differences due to malicious actions are
easily resolved, while its cryptographic nature boosts security [11]. Since
blockchains follow an append-only policy and every member owns a copy,
it is impossible for old blocks to be deleted or modified, making data on the
chain tamper-resistant [14].
In order to cryptographically sign and link blocks to each other, hash func-
tions are used by blockchain technology. Hashing refers to the application of
a function to an input of any kind, leading to an output, or digest, of a specific
size. Well-known hash functions include secure hash algorithm 256 (SHA-
256), which produces an output of 256 bits, message-digest 5 (MD-5), which
digests the input into 128 bits, and SHA-1, which produces a 160-bit output.
Hash functions are one-way, meaning that they cannot be reversed, while the
slightest change to the input will lead to a digest vastly different [15]. This
makes hash functions optimal for verifying the veracity of data stored in the
blocks. In addition, it is impossible to find inputs that lead to the same digest.
As such, the utilization of hashing is able to highly elevate the security in
blockchain technology.
254 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
!"
Figure 12.2 Hash function operation.
Figure 12.3 depicts a basic diagram of a blockchain network. As dis-
cussed, each block contains transactions, the calculated hash of its header,
and the hash of the previous, or parent block. In blockchains, the first block
created is called the genesis block and it is the only one that does not contain
the hash of the previous block [3]. The header hash is generated by taking as
an input information such as the timestamp, the block’s data, and the parent
block’s hash. Hashing allows traceability of potentially malicious changes,
contributing to blockchain’s secure nature.
12.2 Permission-less and Permissioned Blockchain 255
Figure 12.3 Blockchain architecture.
Blockchain is a versatile, easily integrable technology promising to ele-
vate the security levels of the respective application areas. The versatility of
this technology comes from the fact that it can be used in varying ways – from
verifying transactions to securely storing any kind of data. Thus, blockchain
has become an integral part of NG-IoT, as it can be effectively combined
with other NG-IoT technologies and concepts such as artificial intelligence
(AI), federated learning, cybersecurity, and edge and cloud computing [22].
Blockchain can support secure sharing of model updates in a centralized
federated learning setting, as the model updates can be wrapped as trans-
actions and stored in the blocks; thus, their integrity can be ensured by the
federated clients [23]. In addition, blockchain can support a fully peer-to-peer
AI training systems, where model updates are stored directly on the chain by
the participants in the peer-to-peer network [24]. Finally, blockchains can
be used for logging of actions, authentication, and authorization in a critical
NG-IoT setting, as a cybersecurity solution [25], [26].
12.2 Permission-less and Permissioned Blockchain
Blockchains are categorized based on who can publish new blocks. If there
is no restriction on who can append new blocks on the chain, then the
blockchain is considered to be permission-less. On the other hand, if only
certain entities are allowed to publish new blocks on the chain, then the
blockchain is considered to be permissioned.
Permission-less or public blockchains allow anyone with access to the
network to read and publish new blocks and make transactions [16]. Usually,
256 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
such blockchain networks are used primarily in the finance sector and, more
specifically, in cryptocurrencies. As such, blockchains that are categorized as
permission-less are open-source and free for anyone to download them and
take participation in the network. However, such blockchains face probable
security threats as entities can have free access to the network and thus some
may try to maliciously publish blocks. Consensus mechanisms, explained in
Section 12.3, aim to resolve such issues.
In contrast with permission-less blockchains, permissioned blockchain
networks rely on a central or decentralized entity to allow access to the
chain. In case a centralized entity is responsible for granting access, then
this entity should be trustworthy. Private and consortium blockchains are
both permissioned, with the former being administered by a single entity,
while the latter is being administered by a group of organizations. If users
are not registered by the entity to the network, then they are not able to
publish new blocks, while they may not be able to read blocks, as reading
can be restricted by the entity of authority. In case users have permission
to join the network, they should prove through methods such as certificates
that they are allowed to access to blockchain. Such blockchain networks are
predominantly utilized by organizations that prefer to keep their transactions
and data private and more secure. Organizations may employ permissioned
blockchain to manage inventory and their supply chain, amongst other
options. Permissioned blockchains may be especially useful in NG-IoT use
cases where sensitive data is stored on the ledger, such as hospitals and smart
grids; thus, authentication should be required to obtain the stored information.
Finally, hybrid blockchains combine the characteristics of both a permis-
sioned and a permission-less blockchain network. Specifically, the members
of the network are able to regulate and allow the accessibility of the network
to other users, while the hybrid blockchain users decide whether transactions
are made public [4]. This makes hybrid blockchains a customizable approach
to blockchain networks.
12.3 Consensus Mechanisms
As blockchain networks are composed of distributed and trustless systems,
a mechanism to allow all the nodes to reach an agreement on the validity of
the blocks to be published and the status of the ledger is required. This issue
is especially highlighted due to the lack of a trustworthy central authority
able to regulate and manage all actions in the network. In addition, malicious
actions may be an issue for permission-less ledgers, due to the unregulated
12.3 Consensus Mechanisms 257
Figure 12.4 Permissioned and permission-less blockchains.
nature of such blockchains, and thus actors may attempt to alter the state of
the blockchain. To address this concern, consensus mechanisms are used by
the blockchain to allow the nodes to achieve trust and security between them
and reach an agreement regarding the state of the decentralized ledger.
Proof of work (PoW), otherwise known as mining, is a procedure in
which the participants of the mining process are required to calculate the
hash value of the header of the block to be appended to the ledger [17].
Specifically, the hash value should remain below a given target value. To
achieve this, miners have to find a nonce number, which is able to yield a
lower or equal hash value, when added to the block’s header. When a miner
is able to solve the puzzle and find a nonce that yields a lower hash value,
they send the block with the nonce found to the rest of the network for
verification. The rest of the nodes hash the block header with the nonce, verify
the work conducted by the miner, and proceed by appending the new block
to their copy of the blockchain [5]. PoW consensus model was first seen in
Bitcoin. As the calculation of the nonce is quite a challenging task with high
computational difficulty, the miner able to find the nonce is usually rewarded.
258 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
For the Bitcoin blockchain, the publishing miner receives cryptocurrency as
a reward mechanism.
Figure 12.5 PoW consensus model.
Proof of stake (PoS) is another technique for achieving agreement in a
trustless environment. The concept of PoS is based on the fact that the node
with more stake in the blockchain is less likely to attack the system [18].
In essence, in a cryptocurrency setting, nodes can stake or lock coins in the
system. A validating node is chosen in a semi-random manner, as the decision
is also based on how many coins the node has staked for the procedure. Once
the block is validated and published in the blockchain, the validator receives
a reward in the blockchain’s cryptocurrency. Such a consensus model does
not require the computational and processing effort the PoW model requires
and is not as energy-demanding as the latter [19].
12.4 Smart Contracts
Smart contracts, initially introduced in 1994 by a computer scientist and cryp-
tographer named Nick Szabo, aim at the utilization of blockchain technology
for automating the execution of a contract [20]. Specifically, smart contracts
are computer programs that are able to self-execute when the conditions
Figure 12.6 PoS consensus model.
12.4 Smart Contracts 259
described in the terms are fulfilled, similarly to regular contracts. Those terms
are enclosed in the smart contract’s code, and if an event described in the
terms occurs, the smart contract is triggered and executed.
Since smart contracts leverage blockchain technology, they benefit from
blockchain’s secure, immutable, and tamper-resistant nature. Reliability is
also ensured as all activities are trackable and verifiable through the dis-
tributed ledger. To define a smart contract, the participating parties agree
on its conditions, which are then translated into code following “if/then”
statements, to describe the possible scenarios [21]. Next, the smart contract
is stored in the blockchain network, as displayed in Figure 12.7. This means
that all participants in the network have a replica of the contract. In case a
condition that is included into the description of the contract is met, then the
transaction described gets executed.
Although smart contracts have a wide area of possible applications, as
they are applicable to the legal industry, real estate, healthcare, insurance,
and logistics, they are most predominantly seen in the finance sector. Specif-
ically, smart contracts can contribute to adding transparency in financial
transactions. A simple example would be the purchase of goods by a buyer;
if money is deposited, then the order is confirmed by the seller.
A relatively new type of smart contracts is the Ricardian Smart Contract.
In contrast with regular smart contracts, the Ricardian contracts are legally
Figure 12.7 Smart contracts.
260 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
binding between the participating entities. Similar to smart contracts, they
use blockchain to function and they are also verified by the blockchain
network. The emerging concept of NG-IoT heavily supports the transition to a
ubiquitous computing era, through human-centric advancements. Therefore,
Ricardian Smart Contracts contribute to NG-IoT’s aim as a human-centric
blockchain application, as such contracts are presented both in a human-
readable format, as well as a computer-readable format. Such a shift from
static agreements to dynamic, legally binding computer code facilitates
the transition to a pervasive computing era through NG-IoT, where agree-
ments become automatically enforced, transparent, and verifiable through a
peer-to-peer manner. Overall, smart contracts are a secure and reliable way to
facilitate and automate the agreement procedures between the participating
entities.
12.5 Blockchain Applications for Security and Privacy
Blockchain technology is considered to be the foundation of cryptocurren-
cies, as the concept of it was initially introduced in a cryptocurrency context
[27]. Although blockchain was first designed for such applications, its utility
has since been expanded and blockchain technology has become applicable in
a wide area of industries [11]. This occurs not only due to blockchain’s secure
nature but also due to its distributed, peer-to-peer aspect. Contemporary
businesses are striving to disengage from traditional centralized solutions and
are currently leaning toward the utilization of decentralized systems.
Decentralization allows industries to eliminate the necessity of trusting
a single central entity. This is why blockchain technology is an attractive
solution for multiple areas where the establishment of trust in an untrust-
worthy environment is needed. Blockchain especially benefits modern supply
chain systems. Supply chains are defined as the activities that contribute to the
journey of materials from the initial suppliers to the final customers [6]. Some
supply chain activities are product development, production, and logistics. In
such a context, blockchains can be used for locating the origins of a product,
providing open access to supply chain data and automating the process of
transactions through the utilization of smart contracts.
Another application of blockchain would be the very timely concept of
smart property. Smart property is a combination of NG-IoT and blockchain,
which provides and controls ownership of a smart object through the
blockchain infrastructure through the utilization of smart contracts. This
is especially useful due to the emergence of smart objects and their vast
12.5 Blockchain Applications for Security and Privacy 261
integration in contemporary lifestyle. As such, the distributed objects in
a human-centric NG-IoT ecosystem are assigned to an appropriate owner
through smart contracts. Nick Szabo explains the concept of smart property
through an example where in case a person misses a payment for a car
loan, then a smart contract would revoke the digital keys to operate the
car [7].
Blockchain’s reliability and immutability has made this technology an
asset of high value to critical industries as well. Such application areas require
data to remain unaltered and require tamper-proof history of transactions.
This is the reason why blockchains are especially useful in the healthcare
industry. Due to their decentralized nature, blockchains are excellent for
storing and managing access to electronic medical records (EMRs), which
is an electronic representation of a patient’s health-related data [28], [30]. As
such, EMRs can be presented to the participants of the network in a uniform
format, achieving interoperability between different institutions, which is one
of the main goals of NG-IoT. This is especially useful in case a patient
needs to receive treatment in a foreign country; their records can be made
immediately accessible to the medical personnel in the distributed NG-IoT
ecosystem, taking appropriate actions. Furthermore, in accordance with the
General Data Protection Regulation (GDPR) introduced in the European
Union, patients can have control over their data, choosing to make their EMRs
available to the respective data consumer [8], [29]. Finally, blockchains can
be utilized for the challenging task of remote patient monitoring through
smart contracts, where patient sensor data is checked by a smart contract
and if an emergency occurs, the authorized medical personnel gets timely
notified [9].
Finally, this peer-to-peer technology shows great potential for integration
in the cybersecurity industry, due to the multitude of benefits it offers. Specif-
ically, another important application of the blockchain technology would be
the attestation of devices and services. In an NG-IoT network that consists of
multiple heterogeneous intelligent objects where security is highly critical, it
is of essence to verify the integrity of the software running on the devices.
Blockchain can be used to establish trust through distributed attestation in
an unreliable IoT and NG-IoT ecosystem [10]. Due to the immutability that
characterizes blockchain, data regarding the identification of devices in the
network can be stored in the ledger; this way, unregistered devices with pos-
sibly malicious code will not be able to impact the critical network. Finally,
blockchains may be utilized for logging events in a critical infrastructure.
As such, the output of systems responsible for security, such as intrusion
262 Achieving Security and Privacy in NG-IoT using Blockchain Techniques
Figure 12.8 Examples of blockchain application.
detection systems (IDS), can be registered in the chain providing traceability
and transparency of events.
12.6 Conclusion
The rise of the utilization of heterogeneous intelligent devices in an NG-IoT
ecosystem has led to the necessity for decentralization of tasks and processes.
Furthermore, the novel concept of NG-IoT calls for the interplay of emerging
technologies through a human-centric, decentralized manner. In addition,
a growing number of industries and businesses are striving to disengage
from centralized solutions for the management of processes, data storage,
and securing their systems. This way, the single-point-of-failure issue that
centralized solutions may encounter is eliminated. Blockchain technology
allows the secure decentralization of those processes. Due to its cryptographic
nature, blockchain is immutable, transparent, and is able to establish trust in
an unreliable environment. As described in this chapter, blockchain is the key
component for multiple industries, including the financial industry, supply
chains, healthcare, and cybersecurity. To this end, this trustworthy peer-to-
peer technology promises to transform and secure the respective application
areas, through its highly valuable benefits.
References 263
Acknowledgements
This project has received funding from the European Union’s Horizon
2020 research and innovation program under Grant Agreement No. 957406
(TERMINET).
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