Leveraging a novel NFT-enabled blockchain architecture for the authentication of IoT assets in smart cities

A decentralized smart city, in the context of Web3, is an innovative urban concept that harnesses the power of blockchain technology to improve city operations and enhance the quality of life for its inhabitants. Decentralized technologies, such as blockchain, smart contracts, and decentralized applications (dApps), enable a decentralized smart city to provide greater transparency, security, and efficiency in managing urban resources like energy, water, and waste.

This approach has the potential to foster a more democratic system of governance, where residents can have more input into how their city is run through decentralized voting systems, resulting in a more equitable and democratic approach to urban development¹. Another important aspect of a decentralized smart city considering the Web3 framework is the increased security and privacy of citizen data. By utilizing decentralized data storage and management systems, residents can have greater control over their data, ensuring that it is not exploited or misused by government or private entities.

Hence, various intricate privacy and security measures have been implemented in cyber-physical systems (CPSs) at the industry level². One such popular example is the Distributed Control systems (DCS). The Internet of Things (IoT) networks further allocate the data to the cloud, fog, and edge layer for processing at different levels following the IoT paradigms.

Figure 1 presents the smart city’s generalized architecture, depicting different CPSs working in different fields such as smart homes, smart grids, smart health monitoring, smart vehicles (UAVs—Unmanned Air Vehicles, UGVs—Unmanned Ground Vehicles), process control, oil, and gas distribution, transportation systems, etc. It utilizes cloud computing as a platform-based service model for data access, storage, analysis, and network to centralized data centers and IP networks³.

CPSs heavily depend on the extreme brim of the network that contains the edge nodes. These edge nodes provide limited resources regarding their data collection, storage, and processing efficiency while the IoT networks in CPSs provide a favorable environment for malicious actors for personal gains as shown in Fig. 1. Also, smart cities utilize technologies like software-defined networking (SDN), cloud computing (CC), and fog computing, inheriting the current threats in those arenas⁴.

Blockchain tokenization

The utilization of blockchain (BC)-based tokenization has emerged as a promising solution for asset identification and authentication mechanisms in smart city architecture. Since 2018, Token creation has gained immense popularity with a huge count of Initial Coin-Offering (ICOs) and Security Token Offering (STOs), which raised nearly $20bn⁵. This has led to the widespread recognition of the concept of tokens. Tokenization in blockchain introduces the idea of a digital representation of an asset on the blockchain, commonly referred to as a “programmable asset”. There are two models in BC tokenization for transferring values using smart contracts i.e., the UTXO-based (Unspent Transaction Output) and the Account-based model⁶. Further BC tokenization presents different types of tokens, tangible and intangible, as depicted in Fig. 2. Among the different types of tokens, Security tokens have been utilized for voting rights, patents, copyrights, etc., and tokenized securities for debts, bonds, stocks, and securities. Utility tokens have been utilized for Filecoin, SiaCoin, Golem network, etc., and Currency tokens have been widely deployed to represent fungible and non-fungible assets⁷. BC offers tokenization mechanisms that are algorithms posted as a smart contract on a blockchain.

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In the case of Non-Fungible Token/s (NFT/s), the ownership presents physical or digital assets, including physical property, virtual collectibles, and negative-value assets. Although NFTs are categorized as currency tokens, they can be used for specific purposes, such as the Multi Token Standard (ERC-1155), which allows fungible and non-fungible tokens to be combined in the same token. Some standards support royalty payments (EIP-2981)⁸ and mortgage/rental functions (EIP-2615)⁹, as shown in Fig. 2.

NFTs for assets digitization

Any asset linked to a distinctive cryptographic record refers to an NFT, usually a piece of art and luxury item, services in terms of music, real estate, collectibles, or another presumed valuable object as shown in Fig. 2. The asset refers to any physical asset that is a record maintained in the underlying distributed ledger and can be traded through transactions. These records can be bought sold and traded through digital wallets (such as Guarda, MetaMask, Exodus, and Coinbase to name a few¹⁰) in the form of tokens whose ownership can be claimed upon successful purchase by an NFT Creator/seller. Figure 3 depicts the generalized architecture of an NFT architecture in view of the NFT’s well-known project of CryptoPunks. It comprises two roles, i.e., owner and buyer. To digitize a resource, the owner checks the file, title, and description accuracy to generate the NFT. If the correct details are found, the raw data is digitized into a proper format through ERC721 standard-defined functions in the smart contract (SC)¹¹. It is important to note here that the ERC721 standard for NFT lacks the ability to support the IoT-enabled smart assets in their current state.

Generalized NFTs architecture.

The ERC721 standard functions in the NFT smart contract process the creator/owner’s request, which stores the raw data in a database external to the BC. However, the owner can also store the raw data in the internal blockchain database, which would not infer the execution cost for posting the transactions. Once the raw records are stored in the internal blockchain databank, the owner signs the transaction, including the NFT data hash. It is then sent to the SC, and stored in the NFT registry, as depicted in Fig. 3. Since NFTs are developed and deployed on BC, the blockchain consensus is of much importance in the NFT architecture.

At this point, the smart contract from the NFT registry receives the NFT data transaction. It is ready for the minting and trading process. Here logic in the form of transactions is processed to the consensus nodes in a P2P network to attain consensus for privacy. Once the logic of the ERC721 Token Standard triggers, the NFT data is minted. The transaction posting confirms the minting process, which can be traced at any time with a unique blockchain address providing traceability of the digital assets on BC. The ledger provides the traceability of NFTs, which provides a tangibly defined “digital impression” as a unique identifier. The NFT buyers can transfer the proof of ownership after an approved agreement with the NFT Creator.

Problems associated with the cutting-edge proposed authentication mechanisms

The literature survey presents the current cutting-edge security authentication mechanism for IoT assets in a distributed CPS architecture. The assessment summary of the proposed authentication schemes is presented below.

• The verification of these smart contracts (SC) may face challenges since IoT-enabled smart devices may be inconsistent.

  • SCs in proposed solutions are typically not designed with the heterogeneity and constraints of IoT-enabled smart devices in mind, particularly in the context of the smart city concept.

  • The use of functions and events in smart contracts (SCs) allows for faster implementation of actuation mechanisms in IoT-enabled smart devices.

  • The deployment of smart contracts that include defined authentication functions can enhance security, thus necessitating the consideration of authentication schemes involving smart contracts/decentralized apps (dApps).

• By default, the firmware of IoT-enabled smart devices does not possess a complete security mechanism, which leads to security vulnerabilities from the manufacturer’s standpoint.

  • Especially authentication, access control schemes, and firmware updates are commonly found unattended, posing these assets’ exploitation. In particular, authentication mechanisms, access control schemes, and firmware updates are often neglected, leaving these assets vulnerable to exploitation.

  • In order to alleviate the issues related to authentication and access control based on communication and computational costs, new encryption schemes such as SHAIII, which are both strong and lightweight, can be considered.

• Most of the proposed mechanisms have been implemented on the Ethereum platform, which employs the conventional Proof of Work (PoW) consensus mechanism. Although Ethereum supports the development and deployment of public, private, and hybrid blockchains, it also allows decentralized applications (dApps) to perform functions as needed. Numerous blockchain platforms, including Hyperledger Besu¹², Hyperledger Fabric¹³, Solana¹⁴, etc., feature more efficient consensus mechanisms compared to the traditional Proof of Work (PoW) consensus mechanism employed by Ethereum, which could be used to develop smart contract-based solutions with improved performance.

  • The implementation of blockchain-based solutions for smart city infrastructure should consider the efficiency and security of the underlying consensus mechanism employed. Although the traditional Proof of Work (PoW) consensus mechanism in Ethereum has been commonly used in proposed solutions, other platforms like Hyperledger Besu, Hyperledger Fabric, and Solana offer more efficient alternatives, including IBFT, IBFT 2.0, and Clique. These consensus mechanisms should ensure robust fault tolerance, decentralization, stability, and high-level security and authentication stability of IoT-enabled smart devices to support the smart city infrastructure. The effectiveness of these schemes has been evaluated based on security services for collaborative authentication, decentralization, and stability. The analysis reveals that most issues are related to access control and data anonymity.

  • The proposed mechanisms in recent studies aim to achieve decentralization by employing blockchain but they lack sufficient security and reliability. As a result, it is imperative to develop a consensus mechanism that is not only robust but also reliable to address the security issues in the blockchain.

• In recent times, Physically Unclonable Functions (PUFs) have emerged as a preferred option considering Trusted Platform Modules (TPMs) for identifying devices in blockchain-based solutions.

  • Since PUFs result from hardware modification, they come with the cost of modifying the device properties and adding manufacturing costs to the budgets, making it hard to develop to implement in smart city scenarios.

  • As there will be billions of devices connected to the internet, in the case of smart cities, the manufacturing costs to develop PUFs would not be suitable for Governments and businesses to consider such implementation.

• In a recent research work¹⁵, the utilization of non-fungible tokens (NFTs) has been proposed to represent unique assets and their ownership using a unique identifier. However, in this study, these tokens were utilized to bind IoT assets physically using PUFs.

  • The representation of assets also incorporates authentication mechanisms that rely on PUF to capture the physical characteristics of devices. These mechanisms leverage the devices’ private keys and BCA addresses to identify and represent them. The mechanism, however, has not been designed to cater to a complete set of security services (CIA & AAA).

The approach relies on Physical Unclonable Functions (PUF) as an additional hardware component, which must be included by the manufacturer. Based on issues associated with the solutions in the literature, the research gap has been presented which leads to the methodology of the proposed architecture.

Research gap

Since the blockchain-based architectures to depict admin, users, edge, and fog devices utilizing non-fungible tokens (NFTs) in the literature are explicitly lacking, the proposed NFT-enabled expansion utilizes newly defined attributes for representation from a software perspective leaving off the need to update the customer premises equipment (CPE) hardware. The resource-constraint nature of the edge nodes (i.e., low processing power, low data storage capabilities, low computational resources, etc.) concerning the digital representation, implementation, and authentication aspects of smart IoT assets in a distributed architecture has been explored. It prompts the formulation of the following research questions:

1. 1.

   How to develop and deploy Web3 infrastructure to attain decentralization for assets in cyber-physical systems for a smart city?

2. 2.

   How does a smart contract provide an efficient solution utilizing blockchain tokenization (NFTs)?

3. 3.

   How to describe the authentication mechanism of assets in cyber-physical systems for a smart city concept using blockchain tokenization over Web3 infrastructure?

4. 4.

   Is it possible to utilize NFTs without the hardware modification of CPE?

5. 5.

   How to evaluate and utilize the potential of smart contracts to attain robust security?

Based on the research questions, the contributions of the study have been presented. The subsequent sections of this work embark on an in-depth exploration, driven by the overarching aim of fulfilling the research objectives.

The literature review discusses a proposal of ERC721 in¹⁵ which involves a hardware elevation from the manufacturer resulting in manufacturing costs. However, the proposal only takes into account the IoT device-level security perspective and does not present the architecture for cyber-physical systems. Also, it comes with a few notable issues such as, in case of device malfunction, the association of the NFT with hardware properties may cause a system failure. Furthermore, IoT assets with hardware upgrades have extended startup time, resulting in latency issues, such as initializing the Bootloader in the main System on Chip’s (SoC) internal one-time programmable memory. Since the Bootloader serves as the device’s Root of Trust, it cannot be modified. Furthermore, the on-chip Static-RAM, which is also regarded as an SRAM PUF, cannot be modified, but it raises notable concerns regarding time complexity, computational complexity, and latency problems.

As opposed to that, non-fungible tokens for cyber-physical systems depict weak prevalence due to the need to develop interchangeable and novel components to handle the transaction volume related to the digitization of IoT assets and data generated by them. Novel modules are inevitable for non-fungible currency tokens to handle fractional ownership and divisible units. This observation highlights a research gap, emphasizing that although non-fungible currency tokens are less common, their utilization as a representation in blockchain tokenization would require novel considerations to employ their unique characteristics and divisibility challenges in cyber-physical systems. Hence, the NFT functionality has been expanded to be employed keeping in view the ERC721 standard for smart assets. Despite the development of major categories, the ERC721 tokens do not define any of the attributes of the smart city infrastructure where assets can be identified by a public key and transact uniquely by the identifiable tokens in their original form.

These unique characteristics through divisibility can be achieved by dependencies like the smart contract that provides a function-based interface to build non-fungible tokens (NFTs) on decentralized networks. According to the set objectives, smart city infrastructure for cyber-physical systems based on the distributed network must be explored to provide security for nodes at the sensing and application layers. The article proceeds to elucidate the design elements of the proof of concept as initially detailed in^16,17. The details are further explored in the upcoming sections.

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Contributions

As depicted in Fig. 2 blockchain tokenization has been utilized in many domains whereas the NFT architecture in Fig. 3 shows the adaptable tokenization of assets, which offers security comparable to that of cryptocurrency and has the potential for extensive token usage. Nonetheless, the standard does not have the capability of defining attributes specifically for smart city applications, also the evidence of such attributes is missing in the available literature. Thus, a novel NFT-based blockchain architecture has been proposed through which the smart city applications for underlying cyber-physical systems can be developed and deployed leading to the contributions made in this research.

In light of the details mentioned in earlier sections for fog computing, blockchain, and the utilization of blockchain tokenization for user and device authentication based on decentralized architectures provides a new dimension, yet provokes new challenges. The research outlined in this article focuses on the following points, which represent the major contributions of this study.

• Our work proposes an innovative NFT-based authentication structure encompassing Owners, Users, fog, and IoT nodes. This architecture aims to digitize IoT assets within smart city infrastructure, enhancing security and accessibility.

• We pioneer a unique approach for integrating IoT-enabled smart devices through tokenization within a decentralized IoT framework. Notably, this mechanism operates independently of centralized entities like Cloud Services, fostering a more autonomous infrastructure.

• Leveraging Externally Owned Addresses (EOA) in blockchain architecture, we establish NFTs as digital representations of smart devices. This adaptation addresses a deficiency in the existing ERC721 standard, allowing for a more robust smart device portrayal.

• Finally, the proposed architecture presented in this research paper centers on the software-based digital representation and authentication of IoT-enabled smart assets. It eliminates the need for any additional hardware upgrades from the manufacturer, such as Physical Unclonable Functions (PUF).

The rigor of the security services, efficiency, and latency have been achieved by evaluations of deployments on private and public ledgers in line with the execution of the contributions in this proof of concept. The paper structure has been ordered as follows. The Literature Survey section discusses the literature review of blockchain-based authentication mechanisms with security services and associated problems in smart city architecture. The Methodology section presents the methodology of the novel NFT architecture along with a stepwise working methodology while the section Design and Implementation discusses the design and implementation aspects of the proposed NFT architecture for the IoT assets such as user, fog, and smart devices authentication over Hyper Ledger Besu, Goerli Testnet, and related architectures. Section Results and discussion presents the implementation and validation of devised components and costs in smart city architecture with results and proof of concept. Finally, a succinct summary concludes the research article.