A Comparative Study of Consensus Algorithms for Blockchain-Based Real-Time IoT Logistics Systems

Abstract

Blockchain technology is increasingly adopted in Internet of Things (IoT) logistics to enhance data security, scalability, and real-time transparency. The security threats and data silos in IoT logistics networks forces the adoption of blockchain technology since its tamper-proof distributed ledger system provides secure and scalable tracking capabilities. Blockchain-based system performance and operational suitability for time-sensitive operations depends heavily on the chosen consensus algorithm. The research evaluates five blockchain consensus methods (Proof of Work (PoW), Proof of Stake (PoS), Practical Byzantine Fault Tolerance (PBFT), Raft, and HotStuff) for IoT logistics operations. The research utilized Ethereum for PoW/PoS testing and Hyperledger Fabric for PBFT/Raft and HotStuff prototype testing and measured throughput and latency through standard tools. The results demonstrate that traditional Proof of Work and Proof of Stake systems provide poor performance in terms of transaction speed and high latency that makes them unusable for real-time data processing requirements. In contrast, the permissioned consensus algorithms PBFT, Raft and HotStuff demonstrate higher transaction rates and faster confirmation times compared to traditional mechanisms. HotStuff provides stronger fault tolerance and scalable performance compared to traditional PBFT. Raft demonstrates the highest performance in normal operating conditions. The research demonstrates that consortium or private blockchains using Byzantine fault-tolerant or crash fault-tolerant consensus within restricted environments are better suited for realtime logistics IoT systems than public blockchains based on PoW/PoS.