Blockchain-Based Smart Contracts for Automated Trading Systems in Smart Cities

Abstract

The rapid proliferation of Internet of Things (IoT) devices in modern smart cities has led to the creation of myriad ICT-enabled services ranging from automated healthcare and building monitoring to smart energy management. Traditional centralized systems, however, face significant challenges such as single points of failure, vulnerability to hacking, and data tampering. In this paper, we propose a decentralized framework that leverages Ethereumbased smart contracts to enable secure and autonomous automated trading systems for smart cities. Our approach replaces centralized intermediaries with self-executing contracts, which not only guarantee immutable transaction records and real-time execution but also support dynamic pricing mechanisms that balance supply and demand in real time. We demonstrate our framework through two key use cases-smart healthcare and smart building monitoring-illustrating how smart contracts can automate multi-step workflows while preventing issues such as double spending through robust cryptographic measures. Experimental results obtained from a testbed implementation (utilizing Node.js, web3.js, and Ethereum Virtual Machines on Raspberry Pis) highlight the system's fault tolerance, improved transaction speeds, and scalability. Additionally, simulations reveal that as transaction values increase, the risk of double spending can be mitigated by adjusting the hashing power, ensuring a secure and reliable environment for automated trading. This work contributes to the state of the art in blockchain-based automation by providing a viable, cost-effective alternative to traditional, centralized control systems in smart city applications.