Reputation-based coalition formation for secure self-organized and scalable sharding in IoT blockchains with mobile-edge computing

We propose a fully distributed system architecture and a scalable self-organized sharding scheme for the Internet-of-Things (IoT) blockchains that can guarantee system security without reducing its throughput. In the system, the IoT devices are supported by the set of blockchain peers that gather, process, verify, and store the blocks of IoT transaction records. To support communications among peers, the system is realized in the mobile-edge computing (MEC) network. We design a new consensus mechanism in which each peer votes on the outputs of each block task in its shard. The peer's voting power is computed from its reputation, i.e., trustworthiness in the system. By adopting a reputation-based coalitional game model, we formulate a novel self-organized shard formation algorithm in which each peer acts as a rational player aiming to maximize both its payoff and the coalitional reputation. We prove that the algorithm converges to the reputation-based stable shard structure, i.e., a structure that maximizes the payoff and coalitional reputation of each peer without negatively affecting other peers. The algorithm shows a superior performance in terms of system security and throughput when compared to state-of-the-art sharding schemes and reputation-based blockchains.