With the the emergence of the Internet-of-Things (IoT) and Cyber-Physical Systems (CPS), modern computing is now transforming from residing only in the cyber domain to the cyber-physical domain. I focus on one important aspect of this transformation, namely shortcomings of traditional security measures. Security research over the last couple of decades focused on protecting data in regard to identities or similar static attributes. However, in the physical world, data rely more on physical relationships, hence requires CPS to verify identities together with relative physical context to provide security guarantees. To enable such verification, it requires the devices to prove unique relative physical context only available to the intended devices. In this work, I study how varying levels of constraints on physical boundary of co-located devices determine the relative physical context. Specifically, I explore different application scenarios with varying levels of constraints – including smart-home, semi-autonomous vehicles, and in-vehicle environments – and analyze how different constraints affect binding identities to physical relationships, ultimately enabling IoT devices to perform such verification. Furthermore, I also demonstrate that sensing may pose risks for CPS by presenting an attack on personal privacy in a smart home environment.