With the evolution of the internet and innovative technologies, the world has now become a small village, where many sophisticated applications are taking place to make our lives more enjoyable and comfortable. With the huge benefits which we get from internet-based technologies, there also are significant concerns for user data privacy and security. As the domain of internet-based applications widens, so does the scope of cyber privacy and attacks. In particular, security and privacy are critical issues in the Internet of Things (IoT). Critical areas IoT, where security needs to be strengthened, are Location-Based Services (LBS) and Smart City, where a huge number of applications are processed. As IoT combines millions of tools and gadgets to deal with a huge number of applications, the security and privacy concerns need to be addressed proportionally. Many researchers have contributed to ideas, methods, approaches, techniques, and systems to combat the menace of security and privacy breaches. However, none of these mechanisms is perfect; rather each of them has one or more anomalies or weaknesses. The aim of this paper is to propose a new approach known as the Bartering Approach, which increases the level of privacy and decreases the cost and performance compared to the previous approaches. This article also provides an overview of the available methods and approaches currently available for ensuring security and privacy.