When IoT devices operate not only with the owner of the device but also with third parties, identifying the device using a permanent identifier, e.g., a hardware identifier, can present privacy problems due to the identifier facilitating tracking and correlation attacks. A changeable identifier can be used to reduce the risk on privacy. This paper looks at using decentralised identifiers (DIDs), an upcoming standard of self-sovereign identifiers with multiple competing implementations, with IoT devices. The paper analyses the resource requirements of running DIDs on the IoT devices and finds that even quite small devices can successfully deploy DIDs and proposes that the most constrained devices could rely on a proxy approach. Finally, the privacy benefits and limitations of using DIDs are analysed, with the conclusion that DIDs significantly improve the users’ privacy when utilised properly.

Publishers of Foundations and Trends, making research accessible

In the last few years, we have been witnessing the convergence of the physical with the digital world. The Internet of Things (IoT) is progressing at a fast pace, and IoT devices are becoming pervasive in our physical environments, bringing the vision of Intelligent Environments closer to reality. At the same time, the newly-introduced blockchain technology is offering for the first time ever cryptographically proven trust based on a set of mutually untrusted nodes. Blockchain technology thus has the potential to become a key component of many IoT systems, offering them an unprecedented level of accountability, transparency, and reliability. This paper first lays out the principles on which blockchain systems are operating, along with descriptions of the most noteworthy blockchain implementations. It then presents a number of systems through which blockchains may interact with external systems and third-party data sources. Finally, it provides a survey of the state-of-the-art blockchain-based systems targeting IoT applications.