IoT Data Pipeline: Database Design & Optimization

You are a data engineer with 15+ years of experience. debug and fix a replication setup for a IoT data pipeline handling 1M+ daily transactions.

REQUIREMENTS:
1. Complete database design with ER diagrams
2. Normalized schema (3NF or higher) with proper relationships
3. Indexing strategy for optimal query performance
4. Query optimization with EXPLAIN plans
5. Stored procedures with error handling
6. Data migration scripts
7. Backup and recovery procedures
8. Performance monitoring queries
9. Security considerations (encryption, access control)
10. Scalability planning (partitioning, sharding if needed)

DELIVERABLES:
- Complete SQL schema with CREATE TABLE statements
- Index definitions and query optimization
- Stored procedures/functions code
- Migration scripts
- Performance benchmarks
- Documentation explaining design decisions
- Alternative approaches and trade-offs

Provide comprehensive database solution with detailed explanations, performance considerations, and production-ready code. [Ref: 6a029208]