In this blockchain article, you will learn How To Create A Smart Contract In Blockchain? with the simple steps theoretically.
A smart contract is a computer protocol intended to provide a set of conditions and enforceable commitments, that can be used in the execution or enforcement of a contract.
Smart contracts enable us to exchange our assets like property (land, House), shares, currencies, or anything that value in a transparent way without depending on a third party like brokers or banks.
In this article, we will cover the basics of what you need to know about smart contracts, how they work, and an example uses case for them.
What is a smart contract?
A smart contract is simply a program stored on a blockchain that runs when a set of conditions are met and may include tasks, and conditional behavior.
Smart contracts require participants to agree on the outcome of the contract (i.e., how it will be fulfilled) before it will execute, which eliminates the risk that either party can back out.
The most commonly used type of smart contract involves computer programming (e.g., one step below compiled code) with pre-defined algorithms.
Smart contracts are also distinct from the Virtual Machine (VM) contract which enables Ethereum transactions, but can also be implemented in other blockchain platforms.
Smart contracts are immutable
Smart contracts are built using blockchain technology and are, therefore, completely immutable.
The code written into these contracts can never be altered by anybody else, and they have their own independent “memory”.
Meaning, that when a clause is triggered, the contract’s “state” changes, and the underlying “state” of the contract is either modified or destroyed, in whichever way is required. These are called “triggers”.
Smart contracts can handle both payment and non-payment
To date, Ethereum is most commonly used as a blockchain platform. But smart contracts can also be used to automatically distribute payments, delete transactions and handle non-payment transactions, e.g. funds “locked” in escrow and only released when conditions are met.
How do smart contracts work?
Smart contracts, or self-executing contracts, run in accordance with pre-defined parameters.
For instance, if a certain market condition is met, or a certain pre-defined schedule is met, the contract is automatically triggered and the terms of the contract are performed.
Contrary to a typical contract, where there’s a time limit to fulfill a commitment, a smart contract can remain in a continuously active state and will continue performing its task until another condition is met or a specific deadline is reached.
How to create your own smart contract.
One of the biggest hurdles on the road to widespread blockchain adoption is understanding how the technology works and how it is really used.
While there is a lot of buzz about “smart contracts,” actually achieving the ability to easily create them is a daunting task and quite time-consuming, and remains difficult to understand for those who have no prior knowledge or experience in the space.
To answer that question and provide a quick and easy guide on how to create your own smart contract, I first want to briefly explain how blockchain works and what an “active blockchain” is.
Choose an appropriate Blockchain
There are three types of blockchain technology: public, private, and consortium.
Of these, blockchain in the consortium is likely to be the most important because it offers the highest security and interoperability. However, public blockchains, such as Ethereum, Bitcoin, and Litecoin, have a large user base so are the most accessible.
Once you have chosen your blockchain type, you need to choose the technology that is best suited to your project. Following is the blockchain for smart contracts:
It is the first and most popular blockchain platform for smart contracts that use natural language Programming called Solidity
It is also another platform like Etherum that provides blockchain functioning with high scalability to build smart contracts.
The most popular public blockchain to develop a smart contract for the community.
A Public blockchain launched in 2017, that uses smart contracts to build communities
Get the right tools for your project
You can learn more about setting up your blockchain on the internet and explore how programmatically implement it.
EthJS is a great option for anyone looking to quickly create a fully functional smart contract. It has been developed with cross-platform and smart contract developers in mind, so it is simple to use and user-friendly.
In fact, it is so user-friendly that there is no need for developers to write any code to use it. In addition, because all the functions are native to the Ethereum blockchain, it will only ever run on Ethereum.
Design your smart contract
For a simple example, assume that you have decided that you will offer to sell a sofa to a customer with three months of notice.
After you make the sale, the smart contract will automatically transfer the payment to the customer’s bank account.
1. The first step is to decide which conditions should be satisfied to get your contract “ticked”
2. Your decision should consider how you will process the payment
3. what information will be passed to the other participants
4. How the other participants will receive the completed contract.
For example, if you have negotiated a set price, the contract could instruct the smart contract to automatically send payment to the supplier’s bank account after receiving the signed receipt.
Create your smart contract
Since Ethereum is a platform that supports virtually all smart contract languages (BaaS tools) users have many ways of creating, compiling, deploying, and using smart contracts.
It is worth noting that a contract can be of any size or use, and it’s also possible to create what is called a Genesis Block which consists of a smart contract and all the information needed to run it.
Since you are going to use Solidity to create your smart contract, let’s start by converting your problem statement into an Ethereum smart contract.
Smart contracts are a new phenomenon in the world of business. They are a way of programming a transaction to be automatically executed when certain conditions are met.
It is a chain of blocks, where one block triggers the next, and so on. So far, smart contracts have been used as a digital currency, but the possibilities for this technology are endless.
In this article, we have learned how smart contracts work and what they can do for businesses, and how you can theoretically implement them for your business.