Governance of a Blockchain-Enabled IoT Ecosystem: A Variable Geometry Approach

Abstract

The proliferation of Internet of Things (IoT) applications is rapidly expanding, generating increased interest in the incorporation of blockchain technology within the IoT ecosystem. IoT applications enhance the efficiency of our daily lives, and when blockchain is integrated into the IoT ecosystem (commonly referred to as a blockchain-IoT system), it introduces crucial elements, like security, transparency, trust, and privacy, into IoT applications. Notably, potential domains where blockchain can empower IoT applications include smart logistics, smart health, and smart cities. However, a significant obstacle hindering the widespread adoption of blockchain-IoT systems in mainstream applications is the absence of a dedicated governance framework. In the absence of proper regulations and due to the inherently cryptic nature of blockchain technology, it can be exploited for nefarious purposes, such as ransomware, money laundering, fraud, and more. Furthermore, both blockchain and the IoT are relatively new technologies, and the absence of well-defined governance structures can erode confidence in their use. Consequently, to fully harness the potential of integrating blockchain-IoT systems and ensure responsible utilization, governance plays a pivotal role. The implementation of appropriate regulations and standardization is imperative to leverage the innovative features of blockchain-IoT systems and prevent misuse for malicious activities. This research focuses on elucidating the significance of blockchain within governance mechanisms, explores governance tailored to blockchain, and proposes a robust governance framework for the blockchain-enabled IoT ecosystem. Additionally, the practical application of our governance framework is showcased through a case study in the realm of smart logistics. We anticipate that our proposed governance framework will not only facilitate but also promote the integration of blockchain and the IoT in various application domains, fostering a more secure and trustworthy IoT landscape.