Blockchain for Sustainable Smart Cities: Motivations and Challenges ^†

Abstract

Rapid urbanization and the rising demand for sustainable living have encouraged the growth of smart cities, which incorporate innovative technologies to ameliorate environmental sustainability, optimize resource management, and improve living standards. The convergence of blockchain (BC) technology and the Internet of Things (IoT) presents transformative convenience for managing smart cities and achieving sustainability goals. In fact, blockchain technology combined with IoT devices provides a decentralized, transparent, and safe framework for managing massive volumes of data produced by networked sensors and systems. By guaranteeing accountability, minimizing fraud, and maximizing resource use, blockchain not only facilitates the smooth operation of smart city infrastructures but also encourages sustainable habits. The various uses of blockchain technology in smart city management and its contribution to sustainability objectives are examined in this study. Through an examination of important domains like energy distribution, waste management, transportation systems, healthcare, and governance, the research shows how blockchain promotes effective data exchange and data security, builds stakeholder trust, and makes it possible to establish decentralized organizations to improve decision-making.

1. Introduction

Smart cities are seen to be a concept that, by offering a high standard of living, can help address urbanization issues; in fact, the remarkable rate of urbanization in recent years has accelerated the conversion of typical cities into smart ones, which are urban hubs that use data-driven solutions and digital technology to raise operational effectiveness, increase sustainable expansion, and improve living standards for citizens. Strong technology frameworks that guarantee transparency, security, and scalability are necessary because of the complexity of handling inter-connected systems like energy distribution, waste management, transportation, and governance within these smart cities.

The fundamental features of blockchain provide new ways to handle the complex network of connections in smart city ecosystems. Blockchain facilitates increased trust, accountability, and efficiency by offering a safe platform for data sharing and transaction recording across several parties without requiring centralized authority. Because it promotes efficient resource allocation, reduces waste, and improves environmental supervision through transparent and unbreakable data records, this decentralized method has considerable implications for sustainability [1].

The integrated approach to urban design and administration known as “sustainability” in smart cities aims to establish a tension between environmental preservation, social progress, and economic growth to meet present needs without harming the ability of future generations to meet their own [2]. This idea is strengthened and reinforced in the case of smart cities through the utilization of cutting-edge digital technology, data analytics, and networked systems to maximize resources, increase living standards, and lessen environmental impacts.

Establishing sustainability in smart cities requires striking a compromise between strong security measures and innovative technological integration as smart cities rely on the inter-connectivity of devices; if this inter-connectivity is vulnerable, then people will lose trust in the system [3]. So, as citizens’ top priority, security is crucial to all other parties involved in a smart city [4]; therefore, security plans for a secure smart city should be made at the planning phase, as initial flaws could later cause cascading negative effects. Malicious activity that can interfere with essential services or result in resource misuse, undermining sustainability initiatives, can be prevented via secure infrastructures [5]. Cities can secure their data flows, safeguard critical infrastructure, and build resilient ecosystems that can respond to new threats by including security considerations into the design and deployment of smart technology. Additionally, to strengthen the technological foundation of a sustainable city, this dedication to security boosts public trust, which encourages community involvement and guarantees the success and longevity of sustainability efforts.

The remaining part of this article is organized as follows: Section 2 outlines the literature review, while Section 3 describes the benefits and obstacles of using blockchain in sustainable smart cities and Section 4 wraps up with the paper’s conclusion.

2. Literature Review

2.1. Smart City

When the term “smart city” came into existence in the 1990s, the California Institute for Smart Communities was one of the first to highlight how cities might be planned to employ information technology and how communities could become smart. Although the University of Ottawa Governance Centre began to criticize smart cities a few years later for being overly focused on technology, the phrase “smart city” gained popularity in the early years of the new century because of “urban marking.” Researchers started promoting the emergence of real-life smart towns a few years ago, exploring the many hidden features that go into a self-declarative attribute of the “smart city” title.

As stated by Mohanty et al. [6], a smart city is one that is faster, safer, and has effective networks that leverage telecommunications technologies for the good of its residents. According to [7], smart cities seek to enhance daily living for residents and accomplish sustainable growth. And for Anthopoulos et al. [8], what leads to the improvement of smart cities (SCs) is the mix of technological tendances with urban sustainability.

The term “smart city” is commonly employed as an ideological component in the field of urban planning, where being smarter entails strategic directions. All levels of government and public organizations use the idea of intelligence to differentiate policies and initiatives that aim to promote economic progress, sustainable development, improved citizen quality of life, and happiness [9].

A smart community must be safe, sustainable, efficient, and livable to be developed. As seen in Figure 1, we will examine smart cities in seven main primary domains: smart governance, smart living, smart environment, smart mobility, smart energy, smart infrastructure, and smart energy. Smart living is about designing a better living environment for citizens by collecting all the data about the city such as buildings, roads, and parks, as well as collecting information about energy use and waste. This information helps in developing a computer model that simulates this town to determine, for example, the wind flow through the town in order to adjust the building and move the parks around, as this adjustment could provide better air quality. Computer simulation can help in different ways. It can also help in identifying the perfect places to establish a park based on shadow analysis, as well as analyzing solar irradiance to know where to place solar panels. All this analysis helps in designing a functional city. By offering modern healthcare, education, and public safety services, smart living improves people’s quality of life by guaranteeing that they have access to necessities and a safe, healthy environment [10].

Smart Environment prioritizes sustainable resource management and environmental protection with the use of revolutionary air and water quality monitoring systems, effective waste management techniques, and the promotion of green infrastructure to lessen the effects of climate change [11]. Smart energy ensures a sustainable and dependable energy supply by optimizing energy production and consumption through smart grids, the integration of renewable energy sources, and advanced energy management systems [12].

Using digital platforms and data-driven decision-making, smart governance is a fundamental principle that ensures transparent, effective, and participatory governance, which in turn promotes citizen involvement and trust [13]. In fact, smart city governance is an institutional framework that integrates political strategies and viewpoints, public and social services, transparent governance, and decision-making participation. Through the integration of electric and driverless vehicles, public transportation, and real-time traffic management, smart mobility transforms transportation by lowering emissions, improving accessibility, and reducing congestion. Smart mobility helps with traffic flow simulation, predicting and determining real-time optimization strategies; this real-time analysis shows us where the vehicles are moving around in the city and helps us to determine the transport conditions. Smart mobility is designed to promote more environmentally friendly transportation choices, lower environmental externalities, healthier and more ecologically conscious behaviors, and improved sustainable urban expansion [14,15].

Smart economy promotes digital entrepreneurship, helps smart enterprises, and establishes innovation centers that draw talent and investment, all of which accelerate economic growth, sustainability, and innovation [16]. Smart infrastructure, which includes IoT-enabled buildings, intelligent lighting, and strong telecommunications networks to improve resilience, efficiency, and connectivity, serves as the foundation for the city’s digital and physical framework [17]. In fact, meeting the immediate requirements of urban populations, these pillars work together to form a cohesive and dynamic ecosystem that guarantees long-term sustainability and resilience, making smart cities models of contemporary urban development. In addition, stakeholders may more effectively plan, carry out, and oversee the different facets required to create sustainable, effective, and livable urban settings by grouping smart city activities under these pillars.

2.2. Smart City Challenges

Smart city implementation requires the integration of the latest technology and creative ideas to improve efficiency, sustainability, and urban living. To guarantee successful implementation and long-term sustainability, this transition faces obstacles that must be resolved. Large-scale data collecting and processing, device heterogeneity, design and operating costs, information security, and sustainability are all significant obstacles.

One of the biggest difficulties in practical smart city deployment involves the cost of design and maintenance. In fact, large initial investments in technology, infrastructure, and qualified staff are necessary for the implementation of smart city technologies [18]. In addition, the everyday maintenance and operations of the city are associated with operational expenditures. Smart city budgets may be pressured by ongoing expenses for maintaining, expanding, and improving smart city technologies, particularly in settings with limited funding.

Heterogeneity and interoperability represent another major concern in smart city architecture; numerous technologies from various platforms and vendors are integrated into smart cities [19]. One of the biggest technological challenges is making sure these disparate systems can interact and communicate with one another without any problems.

The implementation of a sustainable smart city strategy may facilitate sustainable urban growth [20]. Indeed, to reduce the impact on the environment, smart technology adoption must be balanced with sustainable resource management techniques. Energy consumption can be greatly increased by smart infrastructure, especially data centers and Internet of Things sensors, which makes the integration of energy-efficient technology and renewable energy sources necessary.

Concerns about privacy and a lack of familiarity with new technologies may cause citizens to oppose changes brought about by smart city efforts; in fact, the parallel advances of technology and malware threats have caused enormous controversy regarding how to secure smart cities and their operations against possible attacks. Data gathering from multiple sources, such as IoT devices, sensors, and citizen interactions, is crucial in building smart cities. It is essential to protect and preserve this enormous quantity of sensitive data to stop exploitation and illegal access. Smart city infrastructures are vulnerable to cyberattacks because of the way in which they are inter-connected. A primary concern is safeguarding vital systems from cyberattacks, including public safety systems, transportation networks, and energy grids. It is crucial to establish and preserve public trust in the usage and protection of personal data. Building trust requires strong security measures and transparent data governance principles.

For long-term success, smart city systems must be designed to scale and adjust to future technological developments and growing urban populations. Involving the community in the planning and decision-making stages guarantees that smart city initiatives reflect the interests and requirements of locals. Smart city challenges necessitate a complex approach that includes technological innovation, strategic planning, strong administration, and effective community involvement.

2.3. Sustainability in Smart Cities

In smart cities, sustainability represents an integrated approach to urban design and administration that attempts to find a balance between environmental preservation, social progress, and economic growth, with the goal of fulfilling current demands without endangering the capacity of future generations to meet their own. According to Girardi and Temporelli, a smart city is a settlement that considers the requirements of its citizens, sustainable growth, economic sustainability, and sensible resource management and a city with smarter energy use, more environmentally friendly services, and more sustainable practices [21]. This idea is reinforced in the context of smart cities through the utilization of advanced digital technology such as IoT, AI and Blockchain, data analytics, and networked systems to maximize resources, increase quality of life, and lessen environmental impacts [22,23,24]. In reality, those technologies help in monitoring and managing resources like water, energy, and waste in a more efficient way [25]. This reduces consumption and minimizes waste, leading to lower emissions and a smaller ecological footprint. Combining green spaces, sustainable transportation, and renewable energy sources improves urban resilience to the effects of climate change. Real-time air and water quality monitoring is made possible by advanced sensing and analytics, which also allow for preventive steps to lower pollution and enhance public health. In addition, all citizens will have access to necessary services, technology, and opportunities in a sustainable smart city, which will reduce gaps in employment, education, and quality of life.

Smart cities can boost economic growth while guaranteeing that development is inclusive and advantageous to all citizens by creating an atmosphere that encourages technological innovation and entrepreneurship; both business and society have seen substantial changes as a result of the growing dependence on and use of digital technologies. New business models are created by integrating digital and sustainable technology into urban entrepreneurship. These developments guarantee the long-term viability of businesses in smart cities [26].

3. Benefits and Challenges of Using Blockchain in Smart Cities

3.1. Motivations

By changing the current structure and offering an accessible and decentralized paradigm, the blockchain (BC) revolution is driving worldwide change. This technology empowers individuals and communities around the world by redefining traditional frameworks and making resources more accessible [27]. By utilizing its natural qualities such as decentralization, transparency, immutability, and security, blockchain technology can revolutionize the way in which cities infrastructures systems are managed and play a crucial part in guaranteeing sustainability in smart cities. Smart city governance can benefit greatly from the decentralized and secure characteristics of blockchain technology, a distributed database that is revolutionizing data storage and control in smart cities [28]. Blockchain as a distributed ledger technology makes transactions safe and transparent by removing the need for middlemen. It provides an open and secure way to track and verify the generation and application of renewable energy, which has the capacity to totally revolutionize the field of renewable energy [29].

In the healthcare domain, blockchain can help in monitoring the health data of citizens, as well as decision-making; a citizen will always be followed by the healthcare data blockchain, which maintains an exhaustive historical record of all medical data, including EHR (electronic health record), access, prescription, billing, and IoT data [30]. Indeed, many of the fundamental flaws in conventional, centralized EHR systems can be addressed by their key characteristics, which include decentralization, immutability, cryptographic security, and transparency. Blockchain is designed to remove single points of failure, offer a tamper-proof and traceable record of transactions, and enable safe peer-to-peer data sharing without the need for intermediaries [31]. Blockchain integration into EHRs offers potential for a system in which patient records are easily shareable across healthcare ecosystems with appropriate permission management, in addition to being safe and unchangeable. Only authorized parties can access sensitive health information thanks to the automation and enforcement of regulations pertaining to data sharing, permission, and access control provided by smart contracts, which are self-executing contracts with the terms of the agreement explicitly encoded [32]; in the case of required compromises or revocation, these smart contracts efficiently provide and facilitate money transfers and implement access control regulations [33]. As an example, Hashim et al. [34] suggest a Cross-Chain Communication (CCC) protocol to combine diverse blockchain networks in a healthcare federation and facilitate the safe and effective exchange of Electronic Health Records (EHRs). Three modules are included in these smart contracts, transactions are standardized into a consistent format that is compatible with target networks by means of conversion contracts: a connection contract that uses certification authority addresses to provide secure connection between source and target blockchains and a transfer contract for managing the use of secure cryptographic keys to encrypt and move EHR data between networks. Through digital signatures and patient consent verification, the CCC protocol guarantees data authenticity and privacy while facilitating smooth data flow without changing the status of the linked blockchain networks. Another example of a successful integration of blockchain into the healthcare domain is the proposition of Dhaneshwar Shah et al. [30]; they propose an e-healthcare management system that combines blockchain technology with the Internet of Things (IoT) for safely and effectively managing medical data. The solution makes use of a hybrid blockchain approach that consists of alliance, private, and public chains to guarantee role-based, secure, and decentralized access to medical records. Private chains safeguard sensitive patient data, alliance chains handle data transferred across healthcare organizations, and public chains keep non-sensitive data. For real-time monitoring and analysis, IoT devices gather and send patient data including vital signs and treatment records through secure communication channels.

In fact, more secure smart city services are made possible by blockchain features since, in those types of decentralized networks, no one can control the entire network because blockchain is not managed by a centralized system. Although every node in the network carries a duplicate copy of the ledger, no node has the authority to alter the ledger independently [31], and consensus from every other network node is required to carry out any transaction and make modifications to the data. The correct gathering of information and exchange among many stakeholders, such as residents, service providers, and governmental organizations, are frequently essential in sustainability programs. Energy use, trash management, transportation, and environmental effect data are all safely recorded and readily verifiable thanks to blockchain’s transparent ledger. By increasing stakeholder confidence, this transparency facilitates better decision-making and encourages community involvement in sustainability initiatives [35,36,37].

By offering an unchangeable record of product life cycles, from production to disposal, blockchain can aid in the transition to a circular economy; this reliability lowers fraud and improves adherence to environmental laws by offering transparent, auditable documentation of transactions and activities pertaining to sustainability initiatives. In addition, cities can guarantee responsible recycling and reuse, cut waste, and improve responsibility for environmental requirements by monitoring materials through a supply chain enabled by blockchain technology [38]. By encouraging openness in the disposal and recycling procedures and providing incentives for businesses to embrace sustainable methods, this traceability can lessen the impact on the environment [39].

Peer-to-peer and decentralized governance models are made possible by blockchain, allowing stakeholders to actively engage in decision-making. This can involve residents participating in budgetary, environmental, or urban planning processes through blockchain-based voting systems, provide fast and secure election results, lower long-term expenses compared to conventional secure data storage systems, and enhance confidence in the voting process, which may improve voter turnout [40]. In addition to supporting democratic governance, this active involvement guarantees that sustainability policies accurately represent the community’s needs and goals. In contrast to centralized solutions, blockchain could aid in data integrity throughout the storage of personal data and personal data access control by giving citizens the ability to decide where their data is stored and who can access it.

3.2. Challenges

Some difficulties must be overcome when integrating the two concepts of blockchain technology and smart cities. In fact, a lack of experience is a significant barrier to implementing this cutting-edge technology with smart cities. The use of blockchain in smart cities requires legal and regulatory compliance, including with data protection and privacy laws. Consequently, ensuring compliance with these requirements can be a notable challenge as, for blockchain-enabled products to be widely used and accepted, laws are vital [41]. Since decentralized blockchain technology eliminates the need for a centralized authority or a reliable middleman, new industry and governmental laws are necessary to prevent disputes between the parties involved in transactions.

Smart city systems require data sharing across various systems and platforms. However, it is challenging to achieve interoperability between different blockchain-based systems, as each system may have different data structures and protocols. Additionally, blockchain is not well understood as a technology by citizens.

Immutability is one of the strengths of blockchain, but it can also be considered a challenge. In fact, data in blockchain are unchangeable. This can also be a challenge in implementing blockchain in smart cities services; it is important to verify that data are correct before adding them to the network. For example, the General Data Protection Regulation (GDPR) should be considered while managing personal data. Giving EU citizens greater rights and control over their personal data is the aim of GDPR. GDPR grants EU citizens the right to have their personal data deleted, which runs counter to blockchain systems’ immutability feature [42]. Additionally, because blockchain is decentralized, multiple parties may have the ability to add data to a blockchain, which can lead to potential errors or inconsistencies in the data. In a decentralized system, it is hard to monitor data, since no central authority is needed in such networks. So, ensuring data quality in blockchain also requires a strong governance framework, as well as processes for monitoring and verifying data.

Blockchain is not completely invulnerable to hacking or other forms of cyberattacks. To prevent and provide protection against cyberattacks, some technical measures must be in place, such as cryptography and security, besides the right administration and risk management. Here are some examples of common cyberattacks that blockchain systems can be vulnerable to:

• 51% attack: an attack when malicious actors control more than 50% of the computing power on a blockchain network by owning more than 50% of the nodes on the network, giving them the ability to manipulate and alter the network [43]. For example, if the attacker owns 51% of the network, they will be allowed to block new transactions from gaining confirmation, thus interrupting the recording of new blocks and stopping other miners from completing blocks. But still, they cannot change historical blocks; this is impracticable due to the chain of information stored in blockchain networks.
• Phishing attacks are a common form of cybercrime, in which a malicious actor sends an email or message that appears to be from a legitimate source, to trick the user into providing confidential information such as private keys or passwords.
• Sybil attack: In this type of cyberattack, a malicious actor creates varied identities such as user accounts and IP address-based accounts on the decentralized network by using a single node to operate many active Sybil identities synchronously, to manipulate and perform unauthorized actions in the network. This attack can lead to the 51% attack, which enables a malicious actor to control over half of the peer-to-peer network’s total computing power. The integrity of a blockchain system is compromised by this attack, which also has the potential to disrupt networks [44].

Replay attack: A replay attack is when a malicious actor intercepts and retransmits a valid transaction on the blockchain network to commit fraud; this attack exploits data validation requirements. This validation request is typically sent by an authorized user and will be viewed as a standard transmission of data [45]. This type of attack can take place in blockchain networks when they are making upgrades; this process is known as a hard fork. When the network community cannot agree on rule changes or blockchain upgrades because they are dissatisfied with certain features that the currency offers, a hard fork occurs, which is a branching of a cryptocurrency’s blockchain that divides a single cryptocurrency into two. So, the users will be moved to a new version of the blockchain, and anyone who holds tokens on the legacy version will still be given tokens for the new version. Within this process, any transaction considered to be valid in the previous version will be valid in the new ledger, as well.

There are a number of challenges in implementing blockchain, such as managing the storage of large numbers of data, ongoing transaction approval, and scalability issues, which are common in smart cities. On-chain and off-chain data storage methods have been proposed in research; it could be possible to adopt hybrid models by storing sensitive data off-chain, while keeping hashes or verification data on-chain [46].

AI can be another solution for limitations that come with blockchain networks. AI and blockchain offer a lot of promise in increasing security, scalability, and performance. For instance, AI-powered algorithms can analyze transaction data to look for unusual activity, enhancing security procedures and lowering the risks related to smart contract vulnerabilities. By seeing anomalies and possible threats, AI provides vital assistance in predicting and managing disruptive behaviors that can jeopardize the blockchain’s integrity. Furthermore, it facilitates the acceleration of processes like data management and transaction verification, guaranteeing that blockchain systems function effectively without sacrificing security. To effectively identify open parking spaces, direct drivers, and automate parking charge payments, Klabhor et al. [47] suggest PARKTag, a smart parking management system that combines blockchain, AI, and deep learning. It employs a routing module to guide vehicles, QR code-based vehicle identification, on-field cameras and a deep learning model to detect open spaces, and blockchain smart contracts for safe, automated ticketing. Using a mobile app, the system ensures security, ease, and transparency while lowering traffic and advancing the objectives of smart cities.

4. Conclusions

It is evident that smart urbanization is a strong and rapidly growing global trend. The number of communities implementing smart projects is anticipated to increase dramatically in the upcoming years due to ongoing technological improvements and a growing focus on durability and living standards. The visible advantages of smart city frameworks in developing resilient, effective, and livable urban environments are becoming more widely acknowledged by stakeholders, policymakers, and urban planners worldwide. Nevertheless, there are obstacles in the way of completely implementing smart cities, including data secrecy, interoperability, the heavy costs of implementation, and regulatory restrictions, which must be carefully addressed. Furthermore, attaining sustainability in smart cities calls for a well-rounded strategy that includes strong security measures to protect private information and vital infrastructures from online attacks.

Blockchain technology supports sustainable smart cities by integrating efficiency, transparency, and trust into the fundamentals of urban management and addressing security challenges. Data-driven sustainability is made scalable by its ability to support decentralized decision-making, optimize resource utilization, guarantee secure transactions, and interact with leading-edge technologies like the Internet of Things (IoT). Blockchain provides the capabilities needed to create resilient infrastructures and communities committed to long-term environmental, economic, and social sustainability as smart cities develop further. To summarize, enhancing cybersecurity frameworks, encouraging public–private partnerships to share the financial and technical responsibilities of implementation, and promoting interoperability through standardized protocols should be the main goals in future smart city development.