  BlockChain (BC) has attracted tremendous attention due to its immutable
nature and the associated security and privacy benefits. BC has the potential
to overcome security and privacy challenges of Internet of Things (IoT).
However, BC is computationally expensive, has limited scalability and incurs
significant bandwidth overheads and delays which are not suited to the IoT
context. We propose a tiered Lightweight Scalable BC (LSB) that is optimized
for IoT requirements. We explore LSB in a smart home setting as a
representative example for broader IoT applications. Low resource devices in a
smart home benefit from a centralized manager that establishes shared keys for
communication and processes all incoming and outgoing requests. LSB achieves
decentralization by forming an overlay network where high resource devices
jointly manage a public BC that ensures end-to-end privacy and security. The
overlay is organized as distinct clusters to reduce overheads and the cluster
heads are responsible for managing the public BC. LSB incorporates several
optimizations which include algorithms for lightweight consensus, distributed
trust and throughput management. Qualitative arguments demonstrate that LSB is
resilient to several security attacks. Extensive simulations show that LSB
decreases packet overhead and delay and increases BC scalability compared to
relevant baselines.
