Contract-Theoretic Pricing for Security Deposits in Sharded Blockchain with Internet of Things (IoT)
ABSTARCT :
A sharded blockchain with the Proof-of-Stake (PoS) consensus protocol has advantages in increasing throughput and reducing energy consumption, enabling the resource-limited participants to manage transactions and in a decentralized way and obtain rewards at a lower cost, e.g., Internet-of-Things (IoT) users. However, the latest PoS (e.g., Casper) requires a steep security deposit, which is the key to provide more robust security guarantees than Proof of Work, but not practical for the owners of heterogeneous IoT devices. This article considers any individual and institute who owns the IoT devices as the potential participant and focuses on designing the proper security deposits in a practical scenario with hidden information and hidden action. To bridge blockchain and the IoT users, we study the problem of balancing the security incentive and the economic incentive under two cases: 1) stake oriented and 2) effort oriented. We propose two joint models under the contract theory framework to efficiently address the problems: 1) joint adverse selection and moral hazard and 2) joint adverse selection and tournament. Both optimal contracts can provide a maximized profit for blockchain. The optimal rewards and security deposits for different types of participants can be determined accordingly. Simulations indicate that the proposed models can overcome asymmetric information and offer feasible contracts. Moreover, it demonstrates that both joint models can provide an economic incentive for the participants without reducing security incentives for the sharded blockchain.
EXISTING SYSTEM :
? Sensors collects data and transmits it to cloud services for storage and processing and existing enterprises will not have enough capacity to handle such data.
? Although Big Data creates challenges for existing database management system because they are made to apply to only structured data and cannot handle semi-structured or unstructured data from IoT devices.
? One way to cope with this would be to implement IoT technology but many barriers for this currently exist.
? Both blockchain and IoT are relatively new research areas with little existing research, which supports the use of a qualitative inductive method.
DISADVANTAGE :
? The dual blockchain approach counters the counterfeit and clone problems, enhances the reliability and usability of the supply chain, and ensures authenticity of edge devices.
? One out-of-place humidity value sensor may raise suspicion but when most of the recent values are abnormal, it may indicate problems with the environment, the sensor, or data submission process.
? However, security issues in IoT systems have not been fully addressed in the rapid development of the concept/technology.
? They listed the limited capabilities, high transaction costs, and in certain cases privacy requirements for the data as main issues in integration of blockchain in IoT.
PROPOSED SYSTEM :
• In the BFT-style PoS validators are also randomly assigned the power to propose blocks but the selection is a voting process among the other validators.
• Eventual consistency is a consistency model proposed for distributed computing systems by seeking a tradeoff between availability and consistency.
• This protocol proposed a corruption delay mechanism for ensuring security, i.e., robustness under sporadic participation and security in the presence of posterior corruption of past committee members.
• Among the anonymous signature schemes, group signature and ring signature were proposed earlier and are the two most important and typical anonymous signature schemes.
ADVANTAGE :
? They investigated the factors that affect the adoption of blockchain in supply chain including scalability, performance, consensus mechanism, privacy considerations, location proof and cost.
? We propose a method to store encoded data from several sensors for more efficient storage and examine the cost when storing data from several IoT sensors on the Ethereum blockchain using three methods.
? The agents manipulate the blockchain through smart contracts creating a transparent and efficient market of electricity in which the peers trade electricity directly between themselves.
? In their work, they made use of queuing theory and non-linear closed control loop to determine when an IoT device should send data to be stored in the blockchain so the mining process is more efficient.
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