A Brief History of Smart Contracts & How to Use Them

A Brief History of Smart Contracts & How to Use Them

Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. Unlike traditional contracts, that could potentially be shrouded in fine print and mystery, smart contracts are transparent and open source. Anyone can view the code and view the parameters and purpose of the contract. 

Within these contracts, the details of an agreement, whether between a buyer and a seller, or any other blockchain event, are directly encoded into lines of code, and are self-executed. Just like any other transaction on chain, smart contracts and the code and agreements within, are saved and immutable. This make them a key building block in any blockchain activity.


A Brief History

Nick Szabo first proposed smart contracts in 1994, but they weren't implemented until the Ethereum blockchain was developed in 2015. Ethereum is a decentralized platform that supports smart contracts, which are programs that execute exactly as intended with no chance of interruption, censorship, fraud, or outside meddling.

By automating procedures and eliminating the need for middlemen, smart contracts have the potential to change a wide range of sectors. Smart contracts can be used in the context of decentralized apps (dApps) to automate a variety of operations, such as the exchange of assets, the monitoring of supply chain data, and the administration of membership lists.

Trustless interactions are one of the main advantages of implementing smart contracts in dApps. There is no requirement for a third party to act as an intermediary because the contract's conditions are encoded into the contract itself and are enforced by the blockchain. This lowers the cost of transactions while simultaneously speeding up the process of finishing them.

Smart contracts also have the advantages of being transparent and unchangeable. All parties involved can see the contract's conditions because they are stored on the blockchain. This guarantees that there is no opportunity for doubt or ambiguity. A contract also cannot be changed after it has been put to the blockchain. This improves the safety and dependability of smart contracts even further.


The Design

What steps must you take to design and implement a smart contract? Choosing the programming language you want to use is the first step. The most widely used smart contract programming language is Solidity, which was created especially for the Ethereum platform. Similar to JavaScript, it is a high-level, object-oriented language.

You can start drafting your contract as soon as you have decided on a programming language. The contract's terms must be expressly stated, and before it is implemented, the contract must undergo thorough testing. Utilizing a tool like Truffle or Remix to aid in the development process is another smart move.

When your contract is ready, you may use a program like MetaMask to deploy it on the blockchain. You will be able to use your web browser to engage with your contract as a result.


Keeping it Secure

It's crucial to keep security in mind when using smart contracts. One of the biggest risks associated with smart contracts is the possibility of an attacker abusing them. In the case that the contract has flaws that would permit an attacker to get access without authorization or change the terms later.

Use tools like Mythril or Oyente to help detect potential vulnerabilities, and properly test your contract before releasing it to reduce this risk. Additionally, it's a good idea to check for common coding errors that could result in vulnerabilities using a tool like Solidity Inspector.


Streamlining Operations

Smart contracts are an effective tool that can be utilized in dApps to streamline processes and eliminate the need for middlemen. You can contribute to ensuring the security and dependability of your contracts by adhering to recommended practices for creating and deploying smart contracts. By relying on smart contracts, you’re relying on the blockchain to do your heavy lifting, which offers your operations a new level of efficiency and effectiveness, whether you're looking to automate the exchange of assets, maintain information about your supply chain, or manage membership lists.