Due to the increasing use of smart components in smart grids, interoperability among them is a crucial aspect to address. IEC61850 is a communication standard that has been already used in substations because of its instant data transfer and the ability to enable data exchange between a variety of smart energyrelated digital technologies. This article studies the application of the communication protocols defined by the IEC61850 standard in Intelligent Electronic Devices (IEDs) by using a prototype testbed architecture running on a real-time digital device. The goal of this activity is to study the impact of smart simulations and the vulnerability in terms of cyber-security. This testbed includes the supervisor, the substation bus, and the process bus communication layer creating a local network exchanging data at distinct levels. Different fault protection scenarios are discussed using both physical and emulated IEDs, and the communication protocols implemented in each scenario are explained showing that additional delays are introduced. In the first two scenarios, the operation of the testbed using physical versus emulated IEDs is analyzed and compared, ensuring the robustness of this methodology in situations where the use of a physical IED would be unfeasible. In these scenarios, the functionality and robustness of the protection mechanisms and communication protocols are confirmed. In the third scenario vulnerability of smart grids that use IEC61850 as their primary communication protocol to data injection attacks is studied. Sniffing the local network, packets are captured and monitored. Spoofed data with the same structure are injected into the network to conduct false data injection attacks on the supervisory unit. Vulnerability to cyber attacks of the IEC61850 protocol in specific situations is shown.