Blockchains and Smart Contracts for the Internet of Things
TL;DR: The conclusion is that the blockchain-IoT combination is powerful and can cause significant transformations across several industries, paving the way for new business models and novel, distributed applications.
Abstract: Motivated by the recent explosion of interest around blockchains, we examine whether they make a good fit for the Internet of Things (IoT) sector. Blockchains allow us to have a distributed peer-to-peer network where non-trusting members can interact with each other without a trusted intermediary, in a verifiable manner. We review how this mechanism works and also look into smart contracts—scripts that reside on the blockchain that allow for the automation of multi-step processes. We then move into the IoT domain, and describe how a blockchain-IoT combination: 1) facilitates the sharing of services and resources leading to the creation of a marketplace of services between devices and 2) allows us to automate in a cryptographically verifiable manner several existing, time-consuming workflows. We also point out certain issues that should be considered before the deployment of a blockchain network in an IoT setting: from transactional privacy to the expected value of the digitized assets traded on the network. Wherever applicable, we identify solutions and workarounds. Our conclusion is that the blockchain-IoT combination is powerful and can cause significant transformations across several industries, paving the way for new business models and novel, distributed applications.
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01 Sep 2019
TL;DR: A decentralized Optimal Power Flow (OPF) model is used to locally coordinate DER in distribution networks, while considering the network constraints, in a distributed, transparent and secure fashion.
Abstract: The rapid development of distributed energy resources (DER) in the distribution grid calls for novel control and coordination solutions. Optimal management of DER will enable end-users to decrease their electricity costs and provide crucial services to grid operators. In this paper, a decentralized Optimal Power Flow (OPF) model is used to locally coordinate DER in distribution networks, while considering the network constraints, in a distributed, transparent and secure fashion. To achieve that, a consensus-based distributed optimization algorithm is developed using the general form Alternating Direction Method of Multipliers (ADMM). To enable transparent and verifiable management of the network, the paper provides a comprehensive procedure for the implementation of the decentralized OPF on a private blockchain-smart contracts platform. The performance of the proposed framework is tested using real data from a case study in a residential neighborhood in Amsterdam with different varieties of DER. The implementation procedure on a blockchain-smart contracts platform may be adopted in other problems that require a smart contract to act as a virtual aggregator.
25 citations
Cites background from "Blockchains and Smart Contracts for..."
...A smart contract is a piece of computer code that is deployed on the blockchain and can execute certain functions when called upon by other agents [17]....
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23 Mar 2020
TL;DR: In this article, the authors evaluate the effect of blockchain technology on firms' operational efficiency in the context of China using panel data for blockchain-based companies listed on stock exchanges in China (Shanghai, Shenzhen and Hong Kong).
Abstract: The purpose of this study is to evaluate the effect of blockchain technology on firms’ operational efficiency in the context of China.,The authors use panel data for blockchain-based companies listed on stock exchanges in China (Shanghai, Shenzhen and Hong Kong) between 2014 and 2018. The operational efficiency of firms that deploy blockchain technology is evaluated using ordinary least squares and system generalized method of moments estimation.,Results suggest that companies’ current year performance exceeds the previous year performance because of blockchain deployment in firms’ operations. Firms with higher financial leverage and return on assets reap more benefits from blockchain. Larger and older firms benefit less from blockchain implementation. Stochastic frontier estimation suggests that, on average, firms attain a 57.76 per cent technical efficiency level, or, put differently, they operate 42.24 per cent below their maximum level of potential output.,Blockchain can benefit firms in terms of consensus, security and trust, spurring the evolution of a new form of organizational dynamics. This study explores the theory of transactional cost analysis under blockchain technology. In addition, this study hypothesizes and empirically demonstrates the significant impacts of blockchain technology on corporations’ operational efficiency, using audited, externally reported financial data. Industry professionals can reap benefits from this research by noticing the magnitude of changes in firms’ financial parameters attributable to blockchain adoption.
25 citations
Posted Content•
TL;DR: This work is the first analysis of the network properties of the ERC20 protocol compliant crypto-coins' trading data, demonstrating that the network displays strong power-law properties.
Abstract: Blockchain technology, which has been known by mostly small technological circles up until recently, is bursting throughout the globe, with a potential economic and social impact that could fundamentally alter traditional financial and social structures. Issuing cryptocurrencies on top of the Blockchain system by startups and private sector companies is becoming a ubiquitous phenomenon, inducing the trading of these crypto-coins among their holders using dedicated exchanges.
Apart from being a trading ledger for tokens, Blockchain can also be observed as a social network. Analyzing and modeling the dynamics of the "social signals" of this network can contribute to our understanding of this ecosystem and the forces acting within in.
This work is the first analysis of the network properties of the ERC20 protocol compliant crypto-coins' trading data. Considering all trading wallets as a network's nodes, and constructing its edges using buy--sell trades, we can analyze the network properties of the ERC20 network. Examining several periods of time, and several data aggregation variants, we demonstrate that the network displays strong power-law properties. These results coincide with current network theory expectations, however nonetheless, are the first scientific validation of it, for the ERC20 trading data.
The data we examined is composed of over 30 million ERC20 tokens trades, performed by over 6.8 million unique wallets, lapsing over a two years period between February 2016 and February 2018.
25 citations
01 Feb 2019
TL;DR: This paper evaluates two frameworks for blockchain development, Parity, and Multichain, which provide configuration and permission flexibility and shows that each framework stands out under specific criteria, and their design decisions imply restrictions on features that are critical for creating secure and efficient blockchain applications.
Abstract: The blockchain is currently under the spotlight of trending technologies. It adds security to private applications in several areas of knowledge, and its versatility results in the development of multiple frameworks to meet the requirements of each application. Thus, it is a key challenge to ensure that blockchain frameworks provide security, access control, and high performance to applications. In this paper, we evaluate two frameworks for blockchain development, Parity, and Multichain, which provide configuration and permission flexibility. Our evaluation is a comprehensive comparison between the frameworks, focusing on the analysis of transaction-validation time, transaction-mining time, transaction-seek time and block-seek time. To this end, we deploy peer-to-peer private permissioned networks, in which the frameworks generate the blockchain applications. For each framework, we provide a realistic workload, based on the distribution of probability of interarrival time of transactions on the Bitcoin network. The results show that each framework stands out under specific criteria, and their design decisions imply restrictions on features that are critical for creating secure and efficient blockchain applications.
25 citations
Cites background from "Blockchains and Smart Contracts for..."
...also investigate the use of smart contracts, but aiming at Internet of Things in addition to microgrids [18]....
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31 Jul 2018
TL;DR: Kontribusi dari penelitian ini adalah merangkum perkembangan Internet of things dengan mengunakan pendekatan studi Tinjauan Pustaka yang sangat pesat mendorong para peneliti mulai meneliti cara berkomunikasi antara Machine to Machine (M2M).
Abstract: Penelitian ini bertujuan untuk mengumpulkan dan meringkas beberapa sumber pustaka terbaru tentang Internet of Things (IoT) dengan tiga sudut pandang: Sejarah, Cara Kerja dan Manfaat IoT. Metode dalam penelitian ini adalah mengunakan metode Systematic Literature Review . Hasil dari penelitian adalah sejarah awal mula IoT pada tahun 2009 oleh Kevin Ashton dengan melakukan penelitian tentang komunikasi antara Machine to Machine (M2M). Ide dasar dari IoT adalah menghubungkan beberapa perangkat dan bertukar data dengan perangkat lainnya dalam satu jaringan. Saat ini perkembangan cara kerja IoT mengalami perkembangan pesat seperti penambahan fitur Security dan Blockchain . IoT membawa dampak yang sangat baik untuk institusi pemerintah, industri, pendidikan dan kesehatan.
25 citations
Cites background from "Blockchains and Smart Contracts for..."
...Oleh karena itu, dari perspektif sistem, realisasi jaringan IoT, bersamaan dengan perangkat dan perangkat jaringan backend yang dibutuhkan, masih belum memiliki pengampu yang siap karena hal baru dan kompleksitasnya [6]....
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References
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TL;DR: The Albanian Generals Problem as mentioned in this paper is a generalization of Dijkstra's dining philosophers problem, where two generals have to come to a common agreement on whether to attack or retreat, but can communicate only by sending messengers who might never arrive.
Abstract: I have long felt that, because it was posed as a cute problem about philosophers seated around a table, Dijkstra’s dining philosopher’s problem received much more attention than it deserves. (For example, it has probably received more attention in the theory community than the readers/writers problem, which illustrates the same principles and has much more practical importance.) I believed that the problem introduced in [41] was very important and deserved the attention of computer scientists. The popularity of the dining philosophers problem taught me that the best way to attract attention to a problem is to present it in terms of a story. There is a problem in distributed computing that is sometimes called the Chinese Generals Problem, in which two generals have to come to a common agreement on whether to attack or retreat, but can communicate only by sending messengers who might never arrive. I stole the idea of the generals and posed the problem in terms of a group of generals, some of whom may be traitors, who have to reach a common decision. I wanted to assign the generals a nationality that would not offend any readers. At the time, Albania was a completely closed society, and I felt it unlikely that there would be any Albanians around to object, so the original title of this paper was The Albanian Generals Problem. Jack Goldberg was smart enough to realize that there were Albanians in the world outside Albania, and Albania might not always be a black hole, so he suggested that I find another name. The obviously more appropriate Byzantine generals then occurred to me. The main reason for writing this paper was to assign the new name to the problem. But a new paper needed new results as well. I came up with a simpler way to describe the general 3n+1-processor algorithm. (Shostak’s 4-processor algorithm was subtle but easy to understand; Pease’s generalization was a remarkable tour de force.) We also added a generalization to networks that were not completely connected. (I don’t remember whose work that was.) I also added some discussion of practical implementation details.
5,208 citations
TL;DR: In this article, a group of generals of the Byzantine army camped with their troops around an enemy city are shown to agree upon a common battle plan using only oral messages, if and only if more than two-thirds of the generals are loyal; so a single traitor can confound two loyal generals.
Abstract: Reliable computer systems must handle malfunctioning components that give conflicting information to different parts of the system. This situation can be expressed abstractly in terms of a group of generals of the Byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement. It is shown that, using only oral messages, this problem is solvable if and only if more than two-thirds of the generals are loyal; so a single traitor can confound two loyal generals. With unforgeable written messages, the problem is solvable for any number of generals and possible traitors. Applications of the solutions to reliable computer systems are then discussed.
4,901 citations
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TL;DR: It is shown that, without a logically centralized authority, Sybil attacks are always possible except under extreme and unrealistic assumptions of resource parity and coordination among entities.
Abstract: Large-scale peer-to-peer systems face security threats from faulty or hostile remote computing elements. To resist these threats, many such systems employ redundancy. However, if a single faulty entity can present multiple identities, it can control a substantial fraction of the system, thereby undermining this redundancy. One approach to preventing these "Sybil attacks" is to have a trusted agency certify identities. This paper shows that, without a logically centralized authority, Sybil attacks are always possible except under extreme and unrealistic assumptions of resource parity and coordination among entities.
4,816 citations
"Blockchains and Smart Contracts for..." refers background in this paper
...Because of the Sybil attack [15], consensus in public networks is costly...
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...anyone can join though, this would be catastrophic because of the Sybil attack [15]: a single entity could join with multiple identities, get multiple votes, and thus influence the network to favor this entity’s interests....
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22 Feb 1999
TL;DR: A new replication algorithm that is able to tolerate Byzantine faults that works in asynchronous environments like the Internet and incorporates several important optimizations that improve the response time of previous algorithms by more than an order of magnitude.
Abstract: This paper describes a new replication algorithm that is able to tolerate Byzantine faults. We believe that Byzantinefault-tolerant algorithms will be increasingly important in the future because malicious attacks and software errors are increasingly common and can cause faulty nodes to exhibit arbitrary behavior. Whereas previous algorithms assumed a synchronous system or were too slow to be used in practice, the algorithm described in this paper is practical: it works in asynchronous environments like the Internet and incorporates several important optimizations that improve the response time of previous algorithms by more than an order of magnitude. We implemented a Byzantine-fault-tolerant NFS service using our algorithm and measured its performance. The results show that our service is only 3% slower than a standard unreplicated NFS.
3,562 citations
"Blockchains and Smart Contracts for..." refers background or methods in this paper
...5If more than 3f + 1 nodes are used, then the quorum thresholds listed in [26] may lead to forks....
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...Tendermint vs PBFT—Tendermint....
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...Sieve [38], a mechanism used in the HyperLedger Fabric project, augments the PBFT algorithm [26] by adding speculative execution and verification phases, inspired by the execute-verify architecture presented in [39]....
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...Tendermint [32] provides BFT tolerance and is similar to the PBFT algorithm; however it provides a tighter guarantee with regards to the results returned to the client when more than one third of the nodes are faulty, and allows for a dynamically changing set of set of validators, and leaders that can be rotated in a round-robin manner, among other optimizations [33]....
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...PBFT works on the assumption that less than one third of the nodes are faulty (f ), which is why say that it requires at least5 3f + 1 nodes....
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Proceedings Article•
19 Jun 2014TL;DR: Raft is a consensus algorithm for managing a replicated log that separates the key elements of consensus, such as leader election, log replication, and safety, and it enforces a stronger degree of coherency to reduce the number of states that must be considered.
Abstract: Raft is a consensus algorithm for managing a replicated log. It produces a result equivalent to (multi-)Paxos, and it is as efficient as Paxos, but its structure is different from Paxos; this makes Raft more understandable than Paxos and also provides a better foundation for building practical systems. In order to enhance understandability, Raft separates the key elements of consensus, such as leader election, log replication, and safety, and it enforces a stronger degree of coherency to reduce the number of states that must be considered. Results from a user study demonstrate that Raft is easier for students to learn than Paxos. Raft also includes a new mechanism for changing the cluster membership, which uses overlapping majorities to guarantee safety.
1,811 citations
"Blockchains and Smart Contracts for..." refers methods in this paper
...popular Raft algorithm [30], is used as a consensus mechanism in Juno [31]....
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