A Blockchain Definition to Clarify its Role for the Internet of Things

Overview: The term blockchain is used for disparate projects, ranging from cryptocurrencies to applications for the Internet of Things (IoT). The concept of blockchain appears therefore blurred, as the same technology cannot empower applications with extremely different requirements, levels of security and performance. This position paper elaborates on the theory of distributed systems to advance a clear definition of blockchain allowing us to clarify its possible role in the IoT. The definition binds together three elements that, as a whole, delineate those unique features that distinguish the blockchain from other distributed ledger technologies: immutability, transparency and anonymity. We note that immutability—which is imperative for securing blockchains—imposes remarkable resource consumption. Moreover, while transparency demands no confidentiality, anonymity enhances privacy but prevents user identification. As such, we raise the concern that these blockchain features clash with the requirements of most IoT applications where devices are power-constrained, data needs to be kept confidential, and users to be clearly identifiable. We consequently downplay the role of the blockchain for the IoT: this can act as a ledger external to the IoT architecture, invoked as seldom as possible and only to record the aggregate results of myriads of local (IoT) transactions that are most of the time performed off-chain to meet performance and scalability requirements