Hierarchical Distributed Ledger for IoT using
Ethereum Blockchain
Prof. Irfan Siddavatam
KJ Somaiya College of Engineering
Mumbai, India
irfansiddavatam@somaiya.edu
Shivam Pathak
KJ Somaiya College of Engineering
Mumbai, India
shivam.pathak@somaiya.edu
Abstract— In the domain of Internet of things there are large
number of devices generating data in the network and submitting
it to their respective configured data collectors. When the sensors
are preconfigured by the data collectors, they can easily verify
the data coming from those sensors for its authenticity using
cryptography. But if a third party wants to buy that data, how
can they trust the data collector for the authenticity of that data
i.e whether the data they are buying is real data or some
randomly generated stream of numbers. In fact, the only option
left is to trust the claim made by the collectors that the data they
are providing is authentic. This project resolves the trust issue by
creating a distributed application using blockchains by
distributing the trust factor to the entire network instead of
trusting a single entity [5]. This system provides authenticity of
data generated by sensor nodes in the network.
Keywords—Internet of things, Distributed Ledger, Blockchain,
Ethereum, Smart Contracts, DAPP
I. INTRODUCTION
The Internet of Things is nothing but connection of variety
of objects not limited to industrial machines to wearable
devices. These devices by means of integral sensors collect
data and perform required task [2]. This data gathered by IOT
sensors is of critical value to many companies as they use this
data for analysis to drive their business needs. The data
generated by sensors is ubiquitous, keeping track of its
origination and trusting the data obtained from third party data
generators is merely impossible without a system in place to
handle this issue. And even a central authority cannot be
trusted to a great extent and another issue is that as the number
of devices in the network grows, the central server also needs
to be upgraded exponentially. So we need a better solution to
address this problem of trusting the authenticity of data and
management of the whole network in an efficient manner.
Therefore, to provide data authenticity in a distributed
manner we have created a blockchain based distributed
application. A blockchain is cryptographically secured
distributed ledger which keeps on growing continuously and is
Prof. Ashwini Dalvi
KJ Somaiya College of Engineering
Mumbai, India
ashwinidalvi@somaiya.edu
Kshitiz Srivastava
KJ Somaiya College of Engineering
Mumbai, India
kshitiz.s@somaiya.edu
maintained by all the nodes in the network [1]. Using
blockchains, we can easily verify the authenticity of the data
in a decentralized manner.
The project provides a platform for buying and selling of
sensor data which also ensures that the data in the given
scenario is authentic and the ownership of that data is
established from the moment it is created. We will accomplish
this need by keeping track of each instance of data along with
maintaining a distributed public ledger of all the transactions
happening in the network regarding data generated by sensor
nodes. The key concepts used in the projects are explained
further.
A. Distributed Ledger
It is a type of digital database which is replicated across
multiple nodes where cloning of the database is defined by a
consensus algorithm and hence a single copy of the database is
shared among all of the nodes. It is employed in peer to peer
network model to counter centralized server model, where
network resilience is of crucial importance.
B. Blockchain
A blockchain is a type of data structure considered to be a
distributed ledger, which is cryptographically secured using
consensus protocol [2]. It is created and maintained so as no
entity can tamper with the blockchain data without the
approval of majority of the network. Blockchain in itself is
nothing but chain of blocks in which each block is a list of
transactions along with the hash, timestamp and other
metadata minted inside each one of them.
C. Ethereum
Ethereum is a blockchain platform that provides a global
infrastructure for creating and deploying distributed
applications on it [7]. It is most widely used platform for
distributed applications because it provides developers to
deploy turing complete code on the blockchain which are
known as smart contracts and the language used to code the
contract is solidity. We can also create private blockchain
network easily using this platform. The infrastructure can
move value around and represent the ownership of property.
Below listed are some terminologies used for in-depth
explanation of project implementation:
● Farm: It is a network of Iot nodes which generally
includes a number of Raspberry pis (or some data
collecting and computing device) as sensor nodes and
full-fledged computer nodes as user nodes.
● Farm Manager: This is the machine in the network
which essentially acts as a data collector and and is
the farm head who maintains and holds responsibility
for the farm.
● Bidders: A user who does not manage any farm but is
interested in buying the data.
● Tokens: It is a representation of real world data
chunk inside the blockchain and the process creating
such instance of data is called tokenization.
II. ARCHITECTURE
It is a distributed peer to peer modeled architecture. The
network architecture of our implemented system is
hierarchical which has two levels of blockchain network viz
local and global. The purpose of having two levels of
blockchain network is to make it more scalable in an
organised manner. All the networks implemented are private
by design. There are multiple local farms each having their
own unique blockchain and a farm manager in it who manages
the entire farm. And then there is one global blockchain which
connects all the farm managers from each farm.
The local farm blockchain maintains a distributed ledger
of data interaction between sensor nodes and farm manager
Figure 1. Network Architecture of the Project DAPP
within their own local network. And the global blockchain
maintains a distributed ledger of data trading among the farm
managers and bidders. Inter-farm interaction happens only in
the global blockchain by the farm managers of the respective
blockchains where data bidding takes place. The global
blockchain consists of farm manager nodes only and there is
only one such blockchain in the entire network. In the global
blockchain, a normal user who is only interested in buying
sensor data can also take part, whom we may call as bidder.
This entire architecture is summarised in figure [1]. In the
mentioned figure, there are 4 different sensor farms, farm
managers representing respective farms and 2 bidders. The
farm manager is the only node which is involved in both local
and global blockchains. It carries the information back and
forth between local and global blockchain.
III. IMPLEMENTATION
To develop our distributed application we have created
some private blockchains using ethereum platform. We
created 5 blockchains in total, 4 local and 1 global. In each
farm, there are 2 to 3 Raspberry Pis which collect and publish
sensor data to their respective farm managers and this is
registered as a transaction in the blockchain. So the local
blockchain contains information about who generated what
data and the essential attributes of the data and not the data
itself because storing the data in the blockchain would mean
exponential growth in the size if the blockchain which would
require large amount of storage for the sensor nodes. So all the
trading takes place by tokenizing the data captured by sensor
nodes for a particular period of time. In local blockchain the
raspberry pis themselves perform the mining work and hence
the sensor nodes themselves compete to add a block in the
blockchain. While, farm managers only queries the local
blockchain for sensor data and links that data to the external
global blockchain, they perform mining in the external global
blockchain where data bidding takes place.
For the functioning of the system we have written two
smart contracts [6] one for local data interaction where the
origination of the data and their attributes are tokenized and
registered in the local blockchain and another for global data
bidding where farm managers and bidders sell and buy that
tokenized data. Once the data is bought by the bidder, the
actual data is transferred to the buyer. All the interaction code
is written using solidity language and compiled and deployed
on the blockchain. The code once deployed cannot be altered
by anyone and hence the actions performed on the tokenized
data is registered in this immutable ledger.
Figure 2. Data Token in Smart Contract
The tokenized data in contract is shown in figure [2], in
which the essential attributes of data are stored and all the
functions of the contract work on this data. Both the contracts
have similar data attributes for the consistency of it across
local and global blockchain.
IV. WORKING
In our project we have some farms having their own
individual local blockchain and global blockchain for inter-
farm interaction. The local smart contract is to record the data
source. This is where the data production node is registered
along with its unique data identification attributes. Once the
data instance is tokenized and registered in the blockchain
using smart contract which is deployed on the same
blockchain i.e local blockchain, it is then sent to the farm
manager and the same transaction is registered in the local
blockchain. All the nodes participating in the network have a
public key and a private key associated with them. That key
pair acts as their ethereum account for ether storage and
transfer which has monetary value in it. Public keys are used
for denoting a particular node and private keys are used for
signing transactions broadcasted by them [4].
Once the farm manager receives the tokenized data, it
registers the new tokenized data on the global blockchain
which is done by interacting with the smart contract deployed
on it. Once that data token is registered it is then enlisted in
the available for bidding section, where other farm managers
and bidders can bid and hence buy that data. Further there is a
limited time frame for which the bidding is open, after that the
bidding is closed by the owner farm manager and the
ownership of that data is transferred to the highest bidder for
the exchange of money. After that buyer gets the actual data.
If no one bids on the data, the data is kept with the owner farm
manager itself. This is the flow of data in our private network.
Figure 3. Dapp Node Architecture
For interfacing with this distributed blockchain application
we have designed a web application which makes API calls
over RPC web protocol provided by each blockchain node
running in the network, so the API calls are local to the
machine itself as shown in figure[3]. All the calls are
javascript based backend calls, hence the general user only
deals with an elegant graphical. If the API call is ought to
change the state of the blockchain then it results in a
transaction and that transaction is then published in the
network for the miners to validate the transaction and add that
transaction to the next block the mine. Once a miner mines the
block, the block is added to the local copy of the blockchain of
that node and the change is propagated to the entire network.
Other nodes in the network add that block to their blockchain
copy only after validating the block. If the consensus builds
for the same change in the blockchain then that becomes the
new state of the chain. And this happens for all the
transactions initiated in the network. This process of block
mining, validation and propagation is carried out by the
miners in the network. While mining, the job of the miner is to
add transactions for its new block creation and perform a
certain mathematical proof of work. Proof of work requires
time to solve as huge amount of computation is involved to
solve it and it is in place to keep the miners honest because
even if a miner wants to add an invalid transaction in the
block, it has to invest its computation power to calculate the
proof of work, after that it has to propagate the mined block
then that propagated block is checked for validation by other
miner nodes in the network before adding that block to their
blockchain copy and they don’t do it as it contains an invalid
transaction but instead they keep on mining for a new block,
hence the consensus does not build on the invalid block and
the dishonest miner wasted its energy on nothing. And also the
ones who are the honest miners get rewarded for mining a
valid block. This is how the proof of work plays a crucial role
in blockchain technology.
V. CONCLUSION
By building a hierarchical blockchain we have created an
easy to scale solution for data trading with trust being
decentralised to the entire network. The design complies with
the intuitive nature of large scale data production
environments and caters to the need of data trading from the
ones who capture it from remote location and sell it for
research and other purposes to the ones who need it for data
processing irrespective of the geographical location. And due
to the distributed nature of application, blockchain technology
fills the trust gap by rewarding the honest miners and
economically punishing the dishonest ones. This solution
provided in the application can deal with any type of mass
produced data set trading on a large scale where the data could
be anything from general environment data to body sensor
data, in our case it is pollution data. Such integration of
blockchain in IOT domain will solve scaling and data tracking
problems of the nodes in the network.
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[6] Smart Contracts written and used for data transaction and bidding.
https://github.com/shvmpthk/ProjectSmartContracts
[7] https://github.com/ethereum/go-ethereum/wiki
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