How to Create Smart Contract in Blockchain 

Creating a smart contract in blockchain is easier than it sounds. It’s a set of rules written in code that works automatically when conditions are met, without needing a middleman like a bank or lawyer. 

Notably, the smart contract market was valued at $684.3 million in 2022, with an expected growth rate of 82.2% per year from 2023 to 2030, potentially reaching $73 billion by 2030.

However, in this article, we will guide you on how to create smart contract in blockchain and explore various aspects of smart contracts. We will break down the steps in a simple and clear way, so you can easily follow along and understand.

What is a Smart Contract?

A smart contract is a special kind of computer program. It’s like an automatic agreement between two people, but it happens on the internet.

Imagine you want to buy something online. You pay, and the website sends the item to you. A smart contract works the same way, but it’s more secure and runs automatically without needing anyone to check it.

Here’s an example of smart contracts :

• You and a friend agree to pay each other when you meet.
• Instead of trusting each other, you use a smart contract.
• When the meeting happens, the smart contract checks if you both showed up. If you did, it automatically pays the agreed amount to the other person.

In short, a smart contract helps people make deals online without needing a middleman, like a bank or a lawyer. It automates everything.

Why Use Smart Contracts in Blockchain?

Smart contracts are helpful because they work automatically. You don’t need anyone to check or approve them. 

They save time and money. Now, we will explain why smart contracts in blockchain are useful and how they can make things easier for you.

Automation

Smart contracts work automatically. They do things when certain conditions are met, without needing a person to do them. 

For example, in real estate, a smart contract can automatically transfer ownership after payment. This makes the process faster and easier.

Cost-Effective

Normal contracts need middlemen like lawyers or brokers. Smart contracts remove them, so you don’t have to pay their fees. This saves money, especially in areas like insurance or real estate. 

For example, IBM says smart contracts can reduce supply chain costs by up to 50%. This happens by removing middlemen, cutting fraud, and automating the process.

Transparency

Smart contracts are clear. All details are visible to everyone involved. Since they use blockchain, everyone can see the contract and check if it’s being followed. 

This helps build trust and reduces the chance of mistakes or dishonesty.

Security

Smart contracts are secure. They use blockchain, which is hard to change. Once a contract is made, no one can change it without the network’s agreement. 

This makes the contract safe from tampering. Blockchain also stops hacking because it doesn’t have one weak spot.

Speed

Traditional contracts take time because they need signatures or approvals. Smart contracts work as soon as the conditions are met. 

For example, payments that usually take days can happen in minutes.

Accuracy

Smart contracts are accurate. They don’t have human errors like mistakes in writing. Since they are coded, they follow the rules exactly. 

This helps avoid disputes and makes contracts more reliable.

How Does a Smart Contract Really Work?

A smart contract works by following rules. Once you agree, it runs by itself. It can do things like pay money or send data automatically. 

In this section, we will explain how a smart contract really works in simple terms.

At First: Deploying the Contract to the Blockchain

When you deploy a smart contract, its code is saved on the blockchain. Once deployed, the contract cannot be changed. 

The contract has a unique address, just like a bank account number. This address helps you interact with the contract.

Next: Triggering the Contract

A smart contract starts when someone sends a transaction to its address. The transaction tells the contract what to do. This can be done by a person or a system. The transaction has the needed information to run the contract.

For example, a person might send cryptocurrency to the contract to make it do something, like sending money to another person.

Then: Smart Contract Execution (Behind the Scenes)

When the contract is triggered, it checks the conditions to make sure everything is correct. If the contract is for transferring money, it checks if the right amount is sent. 

The contract runs on every computer in the blockchain network. All computers need to agree on the result. This is called consensus.

After That: Validating the Input & Logic

When the contract runs, it checks the input. For example, it checks if the person has enough funds. It then follows the rules written in the contract. 

If the conditions are met, the action happens. If not, the transaction is canceled. This is called reverting.

For example, if Alice needs to send 1 ETH to Bob but sends only 0.5 ETH, the contract will reject the transaction.

Following That: Consensus Mechanism

Blockchain networks use a method to check transactions. This is called consensus. It can be Proof of Work (like Bitcoin) or Proof of Stake (like Ethereum after the Merge). 

When a contract is triggered, validators or miners check the transaction. They make sure it follows the rules. Once verified, the transaction is added to the blockchain.

Finally: Executing the Action

When everything is verified, the contract carries out its task. For example, if it needs to transfer funds, it will send the cryptocurrency from one address to another. This happens automatically based on the contract’s rules.

In the End: Transaction Completion

After the contract runs, the result is saved on the blockchain. This creates a new block in the blockchain’s history. The transaction is permanent and cannot be changed or reversed.

How to Create Smart Contract in Blockchain : The In-Depth Approach

Making a smart contract in blockchain is not hard, but it needs steps. You write the contract in a computer language, and it runs automatically. 

This guide will show you how to create smart contract in blockchain , step by step, so you can do it the right way.

Step 1: Understand What a Smart Contract Is

A smart contract is like a program or agreement that works on a blockchain. It does something automatically when certain rules are met. 

Imagine a vending machine: you put in money, select a drink, and the machine gives it to you. A smart contract works in the same way. 

You set the rules (like putting in money), and when those rules are followed, it does the action (like giving the drink).

Step 2: Choose a Blockchain Platform

To create a smart contract, you need to pick a blockchain platform. These are the systems that let you create smart contracts. Some popular ones are:

• Ethereum: It is the most common platform for smart contracts.
• Binance Smart Chain: A platform that works similarly to Ethereum.
• Cardano: Another platform for blockchain smart contracts development, but it’s newer than Ethereum.

Step 3: Learn the Language for Smart Contracts

Each blockchain platform has its own programming language. This is the language you will use to write your smart contract.

• For Ethereum and Binance Smart Chain, you will use Solidity.
• For Cardano, you will use a language called Plutus (which is based on Haskell).

Don’t worry, you don’t need to be an expert in these languages to start. Just begin with the basics.

Step 4: Set Up Your Tools

Before you write the code, you need some tools. These tools help you write, test, and send your smart contract to the blockchain. Some tools you’ll need are:

• IDE (Integrated Development Environment): This is a tool where you will write your code. You can use Visual Studio Code or Remix. Remix is simple and good for beginners.
• Blockchain Node or Test Network: To test your smart contract before it goes live, you use a test network. This network is just like the real blockchain but without any real money.

Step 5: Write Your First Smart Contract

Now, you are ready to write your first smart contract. Here is a simple Solidity example:

pragma solidity ^0.8.0;

contract MyContract {

    uint public myNumber;

    function setNumber(uint _number) public {

        myNumber = _number;

    }

}

Let’s explain this code:

• pragma solidity ^0.8.0;: This line tells the program which version of Solidity to use.
• contract MyContract: This starts the contract called “MyContract.”
• uint public myNumber;: This creates a variable to store a number.
• function setNumber(uint _number): This is a function that sets the number you want.

At this stage, you are designing smart contracts that define the rules for blockchain interactions.

Step 6: Test Your Smart Contract

Before you send your smart contract to the blockchain, you need to test it. This is like trying out a recipe before serving it to guests.

You can use Remix for testing. Remix is a free tool that helps you run your code. You can test if your contract works by trying to set and get the number.

Step 7: Deploy Your Smart Contract

When you are happy with your smart contract, you can deploy it to the blockchain. To do this on Ethereum, you use tools like MetaMask and Infura. These tools help you send your contract to the Ethereum network.

Deploying means that your smart contract will be live. It can now be used by anyone who follows the rules you set. This is the smart contract launch moment.

Step 8: Interact with Your Smart Contract

After your smart contract is deployed, you can interact with it. This means you can call functions, change values, or get information from the contract. 

You can interact with it from a website using JavaScript libraries like Web3.js or Ethers.js.

For example, if you have a contract that stores a number, you can use Web3.js to get that number from your smart contract.

Step 9: Monitor and Update Your Smart Contract

We are the last step of our ‘how to create a smart contract in blockchain’ journey.

Once your smart contract is live, you can monitor it. This means checking to see if it is working as expected.

If you need to fix something, you can update the contract, but remember that you can’t change the old version after it’s been deployed. 

You’ll need to create a new version of the contract.

So, this was our step-by-step guide on how to build a smart contract easily. By following these steps, you can start developing smart contracts and take your blockchain development skills to the next level.

Use Cases of Smart Contracts

Smart contracts can do many things. They help with payments, agreements, and data handling. 

The global smart contracts market is expected to reach $73 billion by 2030. It will grow very fast, at a rate of 82.2% every year. This shows that smart contracts are becoming more important.

Many businesses use them to make things faster and safer. In this guide, we will show you different use cases of smart contracts and how they can help you.

Use Case	What It Means	Example
Decentralized Finance (DeFi)	DeFi uses smart contracts to do things like lending, borrowing, and trading money automatically, without banks or middlemen.	If you borrow money, the smart contract checks if you have enough security (crypto). If you do, it lends you the money automatically.
Supply Chain Management	Smart contracts track products as they move in the supply chain. They make sure everything is in the right place.	When goods are delivered, the smart contract checks if they arrived. If they did, it releases payment to the seller.
Insurance	Smart contracts can automatically pay claims when certain conditions are met, like if something bad happens.	If your flight is canceled, the smart contract checks this and automatically gives you your insurance money back.
Voting	Smart contracts can make online voting secure and automatic, ensuring votes are counted correctly and fairly.	In an election, the smart contract makes sure that each person votes once and that the votes can’t be changed.
Real Estate	Smart contracts help buy, sell, or rent property by automatically completing the transaction when conditions are met.	When you buy a house, the smart contract makes sure you paid. After that, it transfers the house ownership to you.
Healthcare	In healthcare, smart contracts protect medical data and help automatically pay for services.	When you see a doctor, the smart contract makes sure only the doctor can see your records. It can also pay the doctor for you.
Intellectual Property	Smart contracts automatically handle payments and rights for creative work like music, art, or writing.	If your music is played, the smart contract pays you for it automatically every time someone listens to it.
Legal Contracts	Smart contracts are used for legal agreements. They can make sure payments are made and conditions are followed automatically.	If you rent an apartment, the smart contract will take care of collecting your rent every month and sending it to the landlord.
Gaming	In gaming, smart contracts manage virtual items and currencies, ensuring fair trades and ownership of items.	If you buy a special item in a game, the smart contract makes sure you own it and prevents anyone from stealing it.

Security Best Practices for Smart Contracts

Smart contracts can be safe, but you need to follow rules to protect them. If you do not, they can be hacked or broken. In this guide, we will show you how to create smart contract in blockchain the safe way, so your contract is protected from harm.

Test Thoroughly

Before using a smart contract with real money, always test it first. Testing helps to make sure the contract works properly and doesn’t have problems. 

You can test the contract on a test blockchain, which is like a practice version of the real blockchain.

Example:
Imagine you built a contract that sends money to people. You test it on a test blockchain to see if it works. If something goes wrong, you can fix it before using real money on the real blockchain.

Keep It Simple

Smart contracts should do only one thing and do it well. When you add too many features to a contract, it can become confusing and hard to fix if something goes wrong. Simple contracts are easier to understand and safer to use.

Example:
A smart contract that only transfers money from one person to another is much simpler than a contract that does many different things. The simpler contract has fewer chances to break or be attacked.

Use Reputable Libraries

Instead of writing all the code yourself, use libraries that are already tested and trusted. Libraries are pieces of code written by experts and they help you avoid making mistakes. Using libraries saves time and makes your contract safer.

Example:
Libraries like OpenZeppelin are popular in the blockchain community. These libraries provide secure, ready-to-use code that handles tasks like creating tokens (like digital coins) or controlling who can use the contract.

Minimize Gas Costs

In blockchain, when you use a contract, you have to pay a fee called gas. This fee depends on how much the contract does. 

The more complex the contract, the higher the gas cost. It’s a good idea to write the contract in a way that reduces these costs.

Example:
If you use a contract to send money to people, try to make the process simple. If the contract does too many steps, you will pay more gas. A simple contract uses less gas and saves money for everyone.

Avoid External Calls

Smart contracts can call other contracts to do things, but this can be risky. If you call a contract you don’t fully trust, it might do something unexpected, causing problems. Try to avoid calling other contracts unless it is necessary.

Example:
Let’s say your contract calls another contract to send funds. If the second contract has a bug, it could take advantage of your contract. To protect your contract, only call trusted contracts or avoid external calls if possible.

Use Safe Math

When your contract does calculations (like adding, subtracting, or multiplying), use safe math. Safe math makes sure that numbers don’t get too large or too small in a way that breaks the contract. Without safe math, calculations might overflow, causing errors.

Example:
If you add numbers without safe math, they could become so big that they cause errors. Safe math ensures that the numbers are always within the limits and prevents overflow problems.

Conclusion

In conclusion, learning how to create smart contract in blockchain is a great way to automate agreements and transactions. By following the simple steps we’ve shared, you can start using smart contracts for your projects. 

As you explore more, you’ll see how smart contracts can improve efficiency and security. We hope this guide has made it easier for you to understand and get started with creating smart contracts in blockchain.

Importantly, if you ever need assistance or expert advice on smart contracts, Webisoft is here to help guide you every step of the way. 

FAQs

How much does a smart contract cost?

The cost of creating a smart contract can vary. Generally, simple ones are cheaper, but more complex contracts can be expensive. So, it really depends on your needs and platform.

How long does it take to create a smart contract?

Creating a smart contract takes time. Simple contracts may take hours, but more complex ones can take days. Don’t worry—once you get the hang of it, it gets easier and faster!

How to create a smart contract?

To create a smart contract, choose a platform. Then, learn its programming language. Next, write the contract, test it, and finally deploy it to the blockchain. It’s fun and rewarding!

What programming languages are used for smart contracts?

For Ethereum, you’ll mostly use Solidity. For Cardano, it’s Plutus. The languages are simple once you learn the basics. So, dive in, and you’ll feel more confident with each step.

Can a smart contract be changed after deployment?

Sadly, once deployed, smart contracts can’t be changed. If something needs to be updated, a new contract must be created. This may seem frustrating, but it ensures security and trust.

What are the benefits of using smart contracts?

Smart contracts save time and money. They are secure, transparent, and automatic. You’ll love how they reduce mistakes and middlemen. Plus, they make things run smoothly, which is so satisfying!