How to Create a Smart Contract on a Blockchain

What Are Smart Contracts in Blockchain?

Ever since cryptocurrencies have started gaining traction, the technology behind them (the blockchain network model) has also drastically risen in popularity. With the rise of blockchain technology and the scalability this model provides, many new features and functions have been implemented, including smart contracts.

Namely, a smart contract is a self-executing computer protocol that facilitates, verifies, and enforces the negotiation terms of an agreement. Unlike traditional contracts, smart contracts are automatically executed when their conditions are met, and thanks to them, credible transactions can be made without having third parties. Furthermore, all transactions conducted by a smart contract are trackable and, in many cases, irreversible. Although smart contracts can be deployed on most blockchains, Ethereum is currently the most popular blockchain platform that supports them.

There are many reasons why smart contracts are gaining popularity. Their use can eliminate the need for intermediaries, help reduce transaction costs, and increase transparency and trust. However, blockchain smart contracts are still in their early stages of development and have not been widely adopted. Continue reading to learn everything about them.

How Do Smart Contracts Work?

As we mentioned above, smart contracts are self-executing contracts with the terms of the agreement between the buyer and the seller being written into lines of code. By themselves, smart contracts are just blocks of code, and once executed, the code and the terms exist on the blockchain & are written there forever. There are different types of smart contracts, though they all have the same goal.

Namely, these blocks of code have specific conditions and terms, meaning that the contract can be enforced without the need for human intervention. Blockchain smart contracts are more efficient, transparent, and secure than traditional ones. For example, a conventional contract requires two people to sign the papers and an intermediary to verify the contract’s validity - with smart contracts, the need for an intermediary is eliminated.

What Are The Benefits of Smart Contracts?

• More trustworthy: They can eliminate the need for intermediaries and increase transparency & trust between the parties.
• Efficiency: Smart contracts are significantly more efficient, transparent and secure than traditional contracts. They are executed automatically, saving time and reducing the chances of errors.
• Reduced costs: In most cases, intermediaries are required to facilitate traditional transactions. Smart contracts reduce or often eliminate the need for these intermediaries, resulting in lower transaction costs.
• Increased transparency: Smart contracts are transparent because they are stored on a blockchain and can be verified by anyone.

How to Create a Smart Contract on a Blockchain?

There are several ways to create a smart contract on a blockchain. One way is to directly work on a blockchain network that supports smart contracts, like Ethereum, Cardano, or the Binance Smart Chain. Another way is to use an intermediary service that allows you to create and deploy smart contracts on the blockchain.

In most cases, creating a smart contract on a blockchain requires at least some programming knowledge. However, some platforms allow users to create smart contracts without knowing anything about coding. So, it’s safe to say that smart contracts have become very accessible and can be done by anyone.

Why Is Solidity Used for Smart Contracts?

Solidity is a programming language that was created back in 2014, and its primary use is for writing smart contracts & deploying them on a blockchain. This programming language automatically handles the smart contract execution fees, and if they can be paid, the contract gets automatically deployed. It is primarily used on the Ethereum blockchain network, though it can be used on other networks like the Binance Beacon Chain or Polygon’s blockchain.

The reasons why Solidity is the top choice for smart contracts are evident - it is a high-level language that allows developers to write programs that run directly on the Ethereum Virtual Machine (EVM) - a blockchain-based virtual machine that executes transactions and runs smart contracts. Once the program can be executed on a virtual network, it’s easy to execute on the real blockchain too, where it exists on the blockchain history timeline forever.

What Is The Future of Smart Contracts in Blockchain?

As of mid-2022, the future of blockchain smart contracts looks very promising. However, it’s worth mentioning that they are still in their early stages of development and have not been widely adopted. There are also concerns about their security and scalability, but as time goes on, they will become only better and more reliable. Potential questions regarding smart contracts legality are also slowly getting answered, and the situation will only improve as time goes by.

Thanks to everything they offer, blockchain smart contracts have the potential to be adopted across several industries. They could revolutionize the way we do business by making transactions significantly more efficient, transparent, and secure. Only time will tell how big of an impact blockchain smart contracts will have, though their future seems quite bright for now.