IoT Blockchain-based Applications Classification According to Performance Requirements

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Marco Zecchini	--	2009	2022-05-11 14:43:19	\|
2	format correct	Conner Chen	Meta information modification	2009	2022-06-08 04:44:14	\| \|
3	format correct	Conner Chen	+ 2 word(s)	2011	2022-06-08 05:00:59	\|

This entry is adapted from the peer-reviewed paper 10.3390/jsan11020020

A Distributed Ledger Technology (DLT) is a decentralized log of records, the ledger, managed by multiple, usually autonomous, participants (also called users or subjects), across multiple nodes. A blockchain is a type of DLT where transactions are recorded according to an immutable order obtained by means of cryptographic hash functions that chain the blocks in which transactions are recorded. Since DLT gained attention through the diffusion of the blockchain, it is common practice to use the term blockchain even when talking about other types of DLT.

Internet of Things (IoT) blockchain scalability latency

1. Blockchain and DLT Background

A Distributed Ledger Technology (DLT) is a decentralized log of records, the ledger, managed by multiple, usually autonomous, participants (also called users or subjects), across multiple nodes (for more details, see ^[1]). At each instant of time, the ledger represents a unique state that is updated by atomic transaction; this update is essentially the appending of a new record to the ledger. Unlike a centralized database, a distributed ledger is decentralized; there is no need for a central authority or intermediary for processing, validating, and/or authenticating transactions.

A blockchain is a type of DLT where transactions are recorded according to an immutable order obtained by means of cryptographic hash functions that chain the blocks in which transactions are recorded. Since DLT gained attention through the diffusion of the blockchain, it is common practice to use the term blockchain even when talking about other types of DLT. For this reason, in the rest content, the same common practice will be adopted . The most common blockchains can be abstracted as key-value stores. For example, in a blockchain implementing a cryptocurrency, keys are addresses (also called accounts), while values are the balances of their wallets. In this scenario, a transaction is an operation that transfers cryptocurrency from one wallet to another. People call pending transactions those that are generated by users but are not (yet) processed by the blockchain. A confirmed transaction is an immutable transaction that was successfully processed by the blockchain. The state of the blockchain is a totally ordered sequence of confirmed transactions. For efficiency reasons, transactions are not confirmed one-by-one but aggregated into blocks. Pending transactions are confirmed when a new block is hlcreated (or hlmined). The mining of a new block requires:

(1) selecting a subset of pending transactions;
(2) ordering them;
(3) verifying that all transactions of the block, considered in the chosen order, comply with certain consensus rules (which depends also on the application domain).

2. Blockchain Applications Classification According to Performance Requirements

The evaluation of the performance of blockchain is a complex task that requires one to compare technologies with fairly different approaches (e.g., permissionless vs. permissioned blockchain) in search of appropriate trade-offs, the most important of which are well captured in the blockchain trilemma. As an example, it is possible to gain fairly good scalability in permissioned blockchain where a limited number of nodes can participate in the consensus, thus limiting the complexity of permissionless blockchain where every node can participate. However, this improvement in performance is clearly paid in terms of decentralization.

Recent works such as ^[2]^[3] are first attempts to provide a systematic survey of the performance of different blockchain approaches. While a number of performance metrics could potentially be considered in discussion, but only two of the most relevant will be focused in here: latency and transactions throughput.

The latency of a blockchain network is the time between the submission of a transaction to the network and the first confirmation of acceptance by the network in the blockchain. In certain technologies based on proof-of-work, after the first confirmation, the transaction becomes “more final” as more blocks are added beyond the initial confirmation. However, in the IoT case, the first confirmation is usually enough. In particular, when the IoT application involves micropayments, the cost of undoing on confirmation is much higher than the obtained advantage. For example, vehicle rental applications ^[4]^[5] may be based on micropayments, as well as the Helium ^[6] ecosystem.

The transactions throughput of a blockchain is the number of transactions handled per second, usually denoted by TPS. Table 1 in ^[2] shows that regardless of the adopted technology, in fairly limited evaluation environments that can only provide an upper bound on the performance, the latency is between about 0.1 s and 361 s, and the transactions throughput is between about 5 TPS and 6000 TPS. These numbers are in line with some other available performance evaluations ^[7] where Bitcoin performs 7 TPS, Ethereum 20, and Visa roughly 24,000 TPS.

Table 1. Classification of the applications in shown Table 2.

	Low Transactions Throughput	High Transactions Throughput
Low Transaction Latency	We did not find any relevant examples in this class.	This class is the most demanding in terms of blockchain technology. It includes applications in which a potentially unbounded number of IoT devices and/or human subjects transact and need a transaction receipt in an interactive manner. Examples in this class are Medicalchain ^[8], smart car applications ^[9], ElaadNL ^[10], Power Ledger ^[11], Industry Marketplace ^[12], and vehicle rentals ^[4]^[5].
High Transaction Latency	This class is the less demanding in terms of blockchain technology. It comprises applications in which the number of subjects and devices is intrinsically bounded (e.g., landowners) and payments are not interactive. An example of this class is Single.Earth ^[13].	The applications in this class are characterized by a potentially unbounded number of IoT devices and subjects. However, they do not need real-time payment. Examples in this class are Helium ^[6]^[14], PlanetWatch ^[15]^[16], Fishcoin ^[17], SavePlanetEarth ^[18], and SolarCoin ^[19].

Latency requirements are clearly application dependent. However, many applications require some sort of interaction with a human (e.g., a payment should be confirmed before the scooter is unlocked), which provides a guideline for latency. In the following, a latency comparable to the one necessary are considered equivalent to perform a payment by a credit/debit card, which involves the authorization of the card issuer, to be low latency. In processing credit cards transactions, 5 s is considered an upper bound; however, 10 is still tolerable. Similarly, people consider the current throughput of credit card circuits, namely an order of tens of thousands of TPS, to be a high transactions throughput. In this case, this constraint is also relaxed, considering a high throughput of the order of thousands of TPS to be satisfactory.

According to the above considerations, the applications considered in Table 2 can be classified as shown in Table 1. Note that applications with low (bounded) throughput are rare, since IoT technology is pervasive and tends to scale to a large number of IoT devices, unless there is some intrinsic limit in the application domain. any relevant application that requires low latency and is not throughput demanding is impossible to find.

Reference	Short Description	Simplified Flow
Helium ^[6]^[14] (Pub, Unperm)	The Helium network is a decentralized wireless network that enables devices anywhere in the world to wirelessly connect to the Internet. Powering the Helium network is a blockchain with a token incentivizing a two-sided marketplace between coverage providers and coverage consumers. It employs the unique proof-of-coverage consensus.	Coverage providers (P) get a reward in HNT native tokens (R) to host gateways (T) in their premises to offer wireless connectivity—mostly LoRA—to coverage consumers (C) connecting their devices to the Helium network.
PlanetWatch ^[15]^[16] (Pub, Unperm)	PlanetWatch leverages advanced technologies and the engagement of local communities to raise the standards of environmental monitoring. It encourages citizens to operate sensors and consequently earn token rewards for their data streams, thus having the potential of a wide coverage.	A citizen (P) gets a reward in Planet native tokens (R) to host environmental sensors (T)—mostly for air pollution—in their premises. The data produced by those sensors are of interest for service providers or government agencies (C).
Fishcoin ^[17] (Pub, Unperm)	Fishcoin, with its trace protocol, provides a platform to trace, in-chain, all the steps of the fishing supply chain. Digital tokens are used as a means to incentive data sharing in a proportional way: the more you share, the more you earn.	Stakeholders in the fishing supply chain (P) host sensors (T) collecting data on fishing and fish trading all along the supply chain and get rewarded in Fish native token (R) from government agencies and decision makers (C) that currently have little data for 90% of seafood.
SingleEarth ^[13]	Instead of linking carbon and biodiversity credits to the sale of raw materials such as forests, which cause CO $_{2}$ , Single.Earth proposes the “tokenize nature” concept. CO $_{2}$ -producing materials that are kept in the ground are linked to tokens that can be bought by whoever want to contribute to keeping CO $_{2}$ low (for example, by regulation constraints).	Landowners (P) earn Merit native token (R) through nature conservation (T). Companies, organizations, and eventually individuals (C) will be able to purchase tokens and own fractional amounts of natural resources, rewarded with carbon and biodiversity offsets.
SavePlanetEarth ^[18] (Pub, Unperm)	SavePlanetEarth (SPE) is a global initiative dedicated to developing an array of different programs to combat global warming and climate change.	SavePlanetEarth cryptocurrency (R) is offered to investors (C). A carbon credit market opens SPE as an investment for companies and individuals (P) to offset their carbon footprint (T). They can accomplish this by purchasing carbon credits and redeeming them on the blockchain, making everything transparent and verifiable.
Medicalchain ^[8] (Priv, Perm)	Medicalchain enables the user to give healthcare professionals access to their personal health data. Medicalchain then records interactions with this data in an auditable, transparent, and secure way on Medicalchain’s distributed ledger, built using a dual-blockchain structure.	The Marketplace enables Medicalchain users or patients (P) to negotiate commercial terms, in MedTokens native tokens (R), with third parties and healthcare professionals (C) for the use of their personal and health records (T).
SolarCoin ^[19] (Pub, Perm)	Solar energy is now the cheapest fuel in over 150 countries. SolarCoin is a cryptocurrency that incentivizes a solar-powered planet distributing SolarCoin as a reward for solar installations.	Owners (P) of solar installations (T) get a reward in SolarCoin native tokens (R) from citizens or institutions (C) willing to give an incentive for the adoption of solar energy. SolarCoin can be traded for government currencies on cryptocurrency exchanges, or spent at businesses that accept them.
Smart car applications ^[9] (Pub, Unperm)	Data collection on cars and drivers experimented by Jaguar and Land Rover relying upon the IOTA infrastructure.	Drivers (P) install sensors in their car (T) to collect data on their driving habits, which are delivered to service providers and city authorities (C). Producers are rewarded in tokens (R) that can be used for paying, for instance, toll roads, electric charges, and parking fees.
ElaadNL ^[10] (Pub, Unperm)	ElaadNL is a smart charging infrastructure lab founded by Dutch grid operators. It develops an autonomous self-balancing power grid using IOTA for Machine-to-Machine (M2M) communication, where machines pay each other in tokens as incentive to cooperate to balance energy consumption in the grid.	Nodes that charge batteries (P) are rewarded in IOTA cryptocurrency (R) when they help in balancing the grid (e.g., charging slowly), providing an advantage to owners (C) of Power Grid nodes (T) that produce electricity.
Power Ledger ^[11] (Priv, Perm)	In the era of Distributed Energy Resources (DER), Power Ledger is a trading platform, namely a network that allows consumers to sell energy to their peers in a trustless environment. The Power Ledger Platform provides a transparent governance framework that allows the ecosystem to seamlessly interface with energy markets around the globe.	Energy producers (P) realize the value of their investment in DER and POWR native token (R) by monetizing their excess energy (T) in much the same way as Uber and Airbnb allow people to monetize their cars and spare rooms by selling them to other people (C).
Industry Marketplace ^[12] (Pub, Unperm)	The Industry Marketplace is a vendor- and industry-neutral platform, based on IOTA, automating the trading of physical and digital goods and services. The initiative is targeted to support Industry 4.0 projects with Machine-to-Machine (M2M) economy.	Industry 4.0 machine components (T) act as independent service providers (P) and consumers (C). Transactions are performed in IOTA cryptocurrency (R).
Vehicles rental ^[4]^[5]	Scooter/car/bike rental in cities.	Veichles (T) are rent by renting companies (P) to people moving in the city (C) who pay the service using a cryptocurrency (R).

References

Antal, C.; Cioara, T.; Anghel, I.; Antal, M.; Salomie, I. Distributed ledger technology review and decentralized applications development guidelines. Future Internet 2021, 13, 62.
Fan, C.; Ghaemi, S.; Khazaei, H.; Musilek, P. Performance Evaluation of Blockchain Systems: A Systematic Survey. IEEE Access 2020, 8, 126927–126950.
Smetanin, S.; Ometov, A.; Komarov, M.; Masek, P.; Koucheryavy, Y. Blockchain Evaluation Approaches: State-of-the-Art and Future Perspective. Sensors 2020, 20, 3358.
Valaštín, V.; Košt’ál, K.; Bencel, R.; Kotuliak, I. Blockchain based car-sharing platform. In Proceedings of the 2019 International Symposium ELMAR, Zadar, Croatia, 23–25 September 2019; pp. 5–8.
Zhou, Q.; Yang, Z.; Zhang, K.; Zheng, K.; Liu, J. A decentralized car-sharing control scheme based on smart contract in internet-of-vehicles. In Proceedings of the 2020 IEEE 91st Vehicular Technology Conference (VTC2020-Spring), Antwerp, Belgium, 25–28 May 2020; pp. 1–5.
Helium, People-Powered Networks. 2021. Available online: https://www.helium.com/ (accessed on 30 November 2021).
More on Distributed Ledger Technologies|JRC Smart Electricity Systems and Interoperability. Available online: https://ses.jrc.ec.europa.eu/node/31975 (accessed on 9 March 2022).
Medicalchain. Whitepaper: Own Your Health. Available online: https://medicalchain.com/Medicalchain-Whitepaper-EN.pdf (accessed on 30 November 2021).
On the Money: Earn as You Drive with Jaguar Land Rover. 2019. Available online: https://www.jaguarlandrover.com/news/2019/04/money-earn-you-drive-jaguar-land-rover (accessed on 16 November 2021).
ElaadNL Develops Autonomous Self-Balancing Power Grid Using IOTA. 2019. Available online: https://blog.iota.org/elaadnl-develops-autonomous-self-balancing-power-grid-using-iota-de52e9638548/ (accessed on 16 November 2021).
Power Ledger Whitepaper. Available online: https://www.powerledger.io/company/power-ledger-whitepaper (accessed on 29 October 2021).
IoTA Marketplace. Available online: https://data.iota.org/#/ (accessed on 29 October 2021).
Single.Earth. Make a Positive Climate Impact NATURE-BACKED FINANCE. Available online: https://www.single.earth/ (accessed on 29 October 2021).
Haleem, A.; Allen, A.; Thompson, A.; Nijdam, M.; Garg, R. Helium Whitepaper: A Decentralized Wireless Network. 2021. Available online: http://whitepaper.helium.com/ (accessed on 30 November 2021).
Planetwatch|Air Quality Affects Your Health. Look after the Air You Breath. Available online: https://www.planetwatch.io (accessed on 29 October 2021).
Planetwatch|Whitepaper. Available online: https://www.planetwatch.io/white-paper/pdf/white-paper.pdf (accessed on 29 October 2021).
Trace Protocol—Fishcoin Project. Available online: https://fishcoin.co/fishcoin-protocol (accessed on 29 October 2021).
SavePlanetEarth (SPE). Whitepaper: A Carbon Sequestration Crypto Project. Available online: https://saveplanetearth.io/SPE_WhitePaper.pdf (accessed on 30 November 2021).
Solarcoin. Whitepaper. Available online: https://www.allcryptowhitepapers.com/solarcoin-whitepaper/ (accessed on 29 October 2021).

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1. Blockchain and DLT Background

2. Blockchain Applications Classification According to Performance Requirements

References