© 2020, Springer Science+Business Media, LLC, part of Springer Nature. The constant development of interrelated computing devices and the emergence of new network technologies have caused a dramatic growth in the number of Internet of Things (IoT) devices. It has brought great convenience to people’s lives where its applications have been leveraged to revolutionize everyday objects connected in different life aspects such as smart home, healthcare, transportation, environment, agriculture, and military. This interconnectivity of IoT objects takes place through networks on centralized cloud infrastructure that is not constrained to national or jurisdictional boundaries. It is crucial to maintain security, robustness, and trustless authentication to guarantee secure exchange of critical user data among IoT objects. Consequently, blockchain technology has recently emerged as a tenable solution to offer such prominent features. Blockchain’s secure decentralization can overcome security, authentication, and maintenance limitations of current IoT ecosystem. In this paper we conduct a comprehensive literature review to address recent security and privacy challenges related to IoT where they are categorized according to IoT layered architecture: perception, network, and application layer. Further, we investigate blockchain technology as a key pillar to overcome many of IoT security and privacy problems. Additionally, we explore the blockchain technology and its added values when combined with other new technologies as machine learning especially in intrusion detection systems. Moreover, we highlight challenges and privacy issues resulted due to integration of blockchain in IoT applications. Finally, we propose a framework of IoT security and privacy requirements via blockchain technology. Our main contribution is to exhaust the literature to highlight the recent IoT security and privacy issues and how blockchain can be utilized to overcome these issues, nevertheless; we address challenges and open security issues that blockchain may impose on the current IoT systems. Research findings formulate a rigid foundation upon which an efficient and secure adoption of IoT and blockchain is highlighted accordingly.