BLOCKCHAIN-DRIVEN PRIVACY AND RISK MANAGEMENT FOR INTERNET OF THINGS (IoT) SYSTEMS

Abstract

The rapid expansion of the Internet of Things (IoT) has generated vast volumes of interconnected data, introducing new challenges in ensuring privacy, trust, and secure information exchange across distributed environments. Conventional security frameworks often depend on centralized architectures that are prone to single points of failure, data tampering, and unauthorized access. This paper proposes a blockchain-driven privacy and risk management model for IoT systems that leverages the immutability, transparency, and decentralized trust properties of blockchain to overcome these limitations. Integrated within a hybrid AI–Blockchain security framework, the proposed model functions as the privacy and integrity layer that complements AI-based intrusion detection mechanisms. In the proposed system, all security events detected by the AI intrusion detection module are logged onto a private blockchain ledger, ensuring tamper-resistant audit trails and verifiable data provenance. Smart contracts automate privacy enforcement and access control, guaranteeing that only authorized entities can interact with sensitive IoT data. Furthermore, a mathematical risk management cycle is embedded within the framework to quantify and continuously monitor cybersecurity risks through metrics such as likelihood, impact, and residual risk. The integration of blockchain with adaptive risk modeling supports a dynamic and self-regulating IoT defense environment. Experimental evaluation demonstrates that the blockchain layer significantly improves data integrity, auditability, and trust assurance without compromising system efficiency. By decentralizing control and automating policy enforcement, the model effectively mitigates privacy breaches and insider threats. The proposed framework contributes to the advancement of privacy-preserving, transparent, and scalable IoT security architectures, offering a practical pathway toward achieving end-to-end risk governance in critical infrastructure and smart environments.