  Security is one of the fundamental challenges in the Internet of Things (IoT)
due to the heterogeneity and resource constraints of the IoT devices. Device
classification methods are employed to enhance the security of IoT by detecting
unregistered devices or traffic patterns. In recent years, blockchain has
received tremendous attention as a distributed trustless platform to enhance
the security of IoT. Conventional device identification methods are not
directly applicable in blockchain-based IoT as network layer packets are not
stored in the blockchain. Moreover, the transactions are broadcast and thus
have no destination IP address and contain a public key as the user identity,
and are stored permanently in blockchain which can be read by any entity in the
network. We show that device identification in blockchain introduces privacy
risks as the malicious nodes can identify users' activity pattern by analyzing
the temporal pattern of their transactions in the blockchain. We study the
likelihood of classifying IoT devices by analyzing their information stored in
the blockchain, which to the best of our knowledge, is the first work of its
kind. We use a smart home as a representative IoT scenario. First, a blockchain
is populated according to a real-world smart home traffic dataset. We then
apply machine learning algorithms on the data stored in the blockchain to
analyze the success rate of device classification, modeling both an informed
and a blind attacker. Our results demonstrate success rates over 90\% in
classifying devices. We propose three timestamp obfuscation methods, namely
combining multiple packets into a single transaction, merging ledgers of
multiple devices, and randomly delaying transactions, to reduce the success
rate in classifying devices. The proposed timestamp obfuscation methods can
reduce the classification success rates to as low as 20%.
