Blockchain IoT Integration for Transparent and Secure Financial Transactions

Abstract

This study is based on proliferation of IoT devices has created demand for high-rate, low-cost microtransactions, yet conventional blockchains impose fees, latency, and throughput limits that hinder scalable IoT finance. This study aimed to evaluate a hybrid architecture that places microtransactions on a lightweight DAG(IOTA/Tangle-style) plane while periodically anchoring compact commitments to Ethereum to reconcile performance with public auditability. The study implemented a reproducible simulation that ingests IoT telemetry (TON_IoT-style), a DAG transaction and tip-selection model at the edge and samples Ethereum fee/confirmation priors from Google BigQuery public datasets to generate realistic on-chain settlement costs and latencies. Scenario attacks (flooding, replay, recipient-entropy) were injected, and detection models (sequence + +graph features) were evaluated. DAG operation yielded near instant local confirmation (≈1.4 s) and ≈1200 tx/s throughput versus ≈13.2 s and ≈14 tx/s on Ethereum. Periodic anchoring reduced amortized per-payment cost from ≈$0.72 (naive on-chain) to ≈$0.0144 with modest finality delay (median ≈600s), a ≈98% cost reduction. F1 detection was high (≈0.85-0.91) with an acyclic graph (DAG). Ethereum is a practical approach for transparent, secure IoT financial transactions since it preserves DAG performance while providing immutable auditability at negligible amortized cost. Exploring privacy-preserving anchors as well as multi-gateway resilience has become a stepping stone for future research.