Vol.:(0123456789) 1 3 Annals of Telecommunications https://doi.org/10.1007/s12243-021-00858-8 Integration of blockchain and Internet of Things: challenges and solutions S. Zafar 1  · K. M. Bhatti 1  · M. Shabbir 1  · F. Hashmat 2  · A. H. Akbar 2 Received: 31 July 2020 / Accepted: 20 May 2021 © Institut Mines-Télécom and Springer Nature Switzerland AG 2021 Abstract Blockchain-based Internet of Things (BIoT) is an emerging paradigm of Internet of Things (IoT) which utilizes the block- chain technology to provide security services to the IoT applications. In essence, the blockchain built-in security mechanism can provide services such as availability, authentication, authorization, confdentiality, and integrity to the IoT applications. While most of the IoT devices are inherently resource-constrained in terms of computational power and storage capacity, the downside for blockchain is a requirement of massive amount of energy and computational resources for its operation, which poses challenges to the realization of BIoT. This paper strives to explore the challenges associated with the integration of blockchain and IoT and review their solutions. First, a brief introduction of blockchain technology is presented, followed by characterization of blockchain-based IoT applications as per their heterogeneous trafc demand and Quality of Service (QoS) requirements. Next, challenges that limit the design, development, and deployment of BIoT applications are explained in detail such as energy efciency, privacy, throughput, latency, fork problem, security, legal issues, smart contracts, stor- age, and network broadcast mechanism and their proposed solutions are discussed. Finally, future research directions of blockchain and IoT integration are indicated. This investigation will beneft the researchers and developers to identify and solve blockchain and IoT integration challenges in order to realize efcient BIoT applications. Keywords Blockchain · Blockchain-Internet of Things integration · Internet of Things · Resource-constrained devices 1 Introduction Internet of Things (IoT) characterizes the interconnection of various devices and applications with ubiquitous acces- sibility and built-in intelligent services. The IoT has already reshaped the way we communicate with devices. So much so that it will soon transform our world into a hyper-connected cyber-physical space. According to the research group Gartner, 25 billion units of IoT would be installed by the year 2025 [1]. The global economic impact of IoT devices is reckoned to be $2.7 to $6.2 trillion by the year 2025 [2]. The IoT helps the conventional devices to become autonomous and smart. The IoT comprises of people and physical objects known as “Things” and authorizes any “Thing” to commu- nicate and connect, thus transforming the physical world into an extensive information system. Innumerable technolo- gies, like Data Analysis, Cloud Computing, Informational Modeling, and Machine Learning, have become an integral part of the IoT fabric. The IoT refers to the smart devices’ interconnection in order to collect data and make efective, strategic as well as intelligent decisions. However, as IoT devices are growing impressively, the security challenges for these devices are also increasing. The existing IoT systems face a number of challenges such as secure data storage, secure processing, data provenance binding, fault tolerance, data origin integrity, confdentiality, chain integrity, replay attacks, and availability of data. The IoT devices were used in this attack which led to an economic damage of USD 110 million. In 2013, hackers stole 40 million credit card numbers from a US retailer by using Internet-enabled heat- ing and air-conditioning system of target stores [3]. In year 2016, there was a complete Internet shutdown across North America and Europe during Mirai attack [4]. Although the ubiquitous nature of IoT encourages the development of * S. Zafar saima_zafar@yahoo.com 1 Department of Electrical Engineering, National University of Computer and Emerging Sciences, Lahore campus, Lahore, Pakistan 2 Department of Computer Engineering, University of Engineering and Technology, Lahore, Pakistan