How to Create a Smart Contract on Ethereum (2024)

  • Real Vision
  • June 15, 2022
  • 1:39 PM
How to Create a Smart Contract on Ethereum (1)

With the advent of blockchain technology, another technology has gained popularity: smart contracts. A smart contract is a self-executing contract in which the contents of the agreement are written directly into the lines of code. In simple terms, you can think of smart contracts as a collection of code and data that resides on the Ethereum network.

As a concept, smart contracts were proposed by Nick Szabo, a computer scientist and legal scholar in the 1990s. According to Szabo, who designed the virtual currency “Bit Gold” in 1998, smart contracts are transaction protocols that enforce and execute contract conditions.

Smart contracts are not controlled by a user, instead, they are self-executing programs on the Ethereum blockchain. Users can interact with smart contracts by submitting transactions that trigger a function encoded in the smart contract. Similar to regular contracts, smart contracts can define rules, but unlike normal contracts, the terms of the contract are enforced automatically through code and not through human intervention. A perfect analogy to describe a smart contract would be a digital vending machine. To get a snack from a vending machine you have to input an instruction, which automatically triggers a certain output.

The logic of the operation is programmed into the machine. Similar to a vending machine, a smart contract has logic programmed into its code. Also, a vending machine eliminates the need for operators to handle the machines. Likewise, smart contracts have the potential to replace intermediaries in many sectors.

Smart contracts have several benefits. For one, they are transparent. Participants can audit and view encrypted transaction logs. Smart contracts are also permissionless, meaning that anyone can write a smart contract and deploy it onto the Ethereum blockchain. More importantly, smart contracts are composable and can connect with other smart contracts within the Ethereum network.

To deploy a smart contract, you need to pay gas in the same way you would pay for an ETH transaction. The greater a smart contract’s complexity, the more expensive it is to run that smart contract on the public blockchain. A concrete example is given by Eric Lastname, a blockchain developer. According to him, the cost of deploying a simple smart contract is anywhere around $500. However, for a moderate-sized contract, you may have to spend north of $5,000 just on deployment costs.

Different smart contract platforms

While most smart contracts are built on Ethereum, other blockchains support smart contracts too. This includes Solana (SOL), Polkadot (DOT), BNB Chain, and more. However, Ethereum remains the most popular smart contract protocol. Information on the number of smart contracts deployed on Ethereum remains sketchy, but a 2020 study revealed there were over 1 million smart contracts on Ethereum. This number must have grown a lot since then. According to Yahoo Finance, the number of smart contracts deployed in Ethereum peaked in June 2021, at 2.5 million.

Having said that, there are different languages for smart contract deployment.

  • Solidity is a programming language designed to allow developers to create smart contracts. Solidity is based on existing programming languages like C++, JavaScript, and Python. Solidity runs on the Ethereum virtual machine (EVM).
  • Rust is a fast and memory-efficient programming language that is used to build scalable protocols. Rust supports smart contract blockchains such as Solana, Polkadot, and Near blockchain. JavaScript is a general-purpose programming language that is mostly used by developers new to the blockchain space to enable them to start building decentralized products quickly. The programming language is used in Hyperledger Fabric, Solana, or the Icon blockchain.
  • Vyper is a Python-like programming language that is contract-oriented and targets the Ethereum virtual machine (EVM). Vyper was built to improve on the security issues of Solidity.
  • Finally, Yul is an intermediate programming language that is used by Solidity and addresses the needs of different backends. Yul is already used in most Ethereum-based projects.

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How to create a smart contract

Below is a step-by-step guide on how to create and deploy a smart contract on Ethereum.

Step 1: Connect to the Ethereum network.

You can connect to the Ethereum mainnet by downloading and installing a MetaMask wallet on your Chrome browser and enabling it. Once you have completed the setup, proceed to connect it to the Ethereum mainnet.

Step 2: Choose a test network.

You will find a list of test networks in your Metamask wallet. Select one, which will be used to test the smart contract you are building. The test networks include:

  • Robsten Test network
  • Rinkeby Test network
  • Kovan Test network
  • Goerli Test network.

Step 3: Fund your wallet with Testnet ETH.

Eventually, when you are ready to test your smart contract, you will need to have Testnet ETH in your wallet. Fortunately, the process of adding Testnet ETH in MetaMask is straightforward. Click on the “Deposit” and “Get Ether” buttons under the Test Faucet and proceed with the instructions.

Step 4: Use the Remix browser to write your smart contract.

You can use the editor in Remix browser IDE to write your smart contract in Solidity. Remix browser is the best option for writing smart contracts as it comes with several features and is usually used to write basic smart contracts.

Step 5: Create a .sol extension file.

Open the Remix Browser and click on the (+) icon on the left side to create a .sol extension. This makes any programmed file solidity-compatible.

Step 6: Complete your smart contract code.

Choose a version of the compiler from the Remix browser and compile the solidity smart contract code.

Step 7: Deploy the smart contract.

Deploy the smart contract on your selected Ethereum test network by clicking on the deploy button on the Remix browser. Once the transaction is complete, the address of the smart contract will appear on the right-hand side of the Remix browser.

Step 8: Make smart contract ready to go live.

To prepare a smart contract to go live on a blockchain, procedures such as testing or auditing are strongly recommended, besides other considerations. Once reassured that the smart contract is ready to hit the market, the smart contract can be deployed to the Ethereum mainnet.

For a complete visual walkthrough into how smart contracts work, watch below!

RELATED CATEGORIES: Ethereum

How to Create a Smart Contract on Ethereum (2024)

FAQs

How to create a smart contract using Ethereum? ›

Create and Deploy your Smart Contract
  1. Step 1: Connect to the Ethereum network. ...
  2. Step 2: Create your app (and API key) ...
  3. Step 3: Create an Ethereum account (address) ...
  4. Step 4: Add ether from a Faucet. ...
  5. Step 5: Check your Balance. ...
  6. Step 6: Initialize our project. ...
  7. Step 7: Download Hardhat. ...
  8. Step 8: Create Hardhat project.

How do I write my first smart contract? ›

What You'll Need
  1. A basic understanding of Solidity: Solidity is the programming language used to write smart contracts on the Ethereum blockchain. ...
  2. An Ethereum wallet: You'll need an Ethereum wallet to deploy your smart contract on the Ethereum network. ...
  3. Ether: Deploying a smart contract costs gas, which is paid in Ether.
Jul 28, 2023

What does smart contract in Ethereum refer to _____? ›

Smart contracts are code written into a blockchain that executes the actions two parties agree to outside the chain. By automating these actions, the need for an intermediary or trust between the parties is removed.

How much does it cost to put a smart contract on Ethereum? ›

Smart contract creation cost can be anywhere from $10 to $2,000 assuming Ether costs between $1,500 to $2,000. The biggest factors are 1) Ethereum price, 2) the size of the compiled contract (in bytes), 3) the current gas price on the Ethereum network.

How to do a smart contract? ›

  1. How smart contracts work, step by step.
  2. Parties agree to terms and conditions.
  3. The smart contract is created.
  4. The smart contract is deployed.
  5. Triggering conditions are met.
  6. The smart contract is executed.
  7. The contract result is recorded to the blockchain.
  8. Use cases for smart contracts.

What is an example of a smart contract? ›

A smart contract is a self-executing program based on if-then logic. Vending machines provide a good analogy. If someone inserts $2 and presses B4, then the machine dispenses the cookies in the B4 slot. In other words, if the vending machine receives the required item of value, then it performs the requested action.

Can I create my own smart contract? ›

Typically, blockchain developers are the ones creating smart contracts, using their expertise in coding languages and frameworks like blockchain. However, thanks to the wealth of resources available, anyone can become a developer and enter the world of writing smart contracts.

How much does it cost to write a smart contract? ›

Although it's possible to find a smart contract development company ready to help you for nearly $500, the price may reach even more than $5,000. The deployment costs directly depend on the complexity of the project.

Is creating a smart contract hard? ›

Unlike traditional software development, smart contracts require developers to have business knowledge and understand non-traditional programming languages, primarily Solidity. They also must comprehend formal methods of cryptography and networking.

What is the best smart contract platform? ›

Ethereum is the world's first and one of the best smart contract platforms which remains the most popular choice among developers. Following Bitcoin's decentralized concept, Ethereum has become a leader in smart contract platforms. Since its inception in 2015, the platform has launched more than 4,400 dApps.

What does a smart contract address look like? ›

Smart contract addresses operating on TON typically consist of two main components: (workchain_id): denotes the workchain ID (a signed 32-bit integer) (account_id) denotes the address of the account (64-512 bits, depending on the workchain)

How to read Ethereum smart contract? ›

Interacting with Smart Contracts using Etherscan​
  1. Step 1: Go to the Etherscan Sepolia Block Explorer.
  2. Step 2: Go to the contract page by searching the contract address. ...
  3. Step 3: On the contract's page, navigate to the Contract tab and click on Read Contract.
Feb 12, 2024

What is the difference between Ethereum and smart contracts? ›

Gas in Ethereum refers to the computational cost required to execute operations or run smart contracts on the Ethereum network. Each operation or instruction in a smart contract consumes a certain amount of gas, and the total gas cost determines the transaction fee.

Where do Ethereum smart contracts run? ›

The Ethereum blockchain powers the technology underneath. This decentralised and distributed ledger securely records transactions and data. Smart contracts are self-executing computer programs that run on the Ethereum blockchain and enforce the terms of an agreement automatically.

Are Ethereum smart contracts legally binding? ›

In general, smart contracts are enforceable as long as they follow the basic rules of contractual agreements. These include the following. As with any agreement, there must be an offer, an acceptance of that offer and consideration. Put simply, these are defined thusly.

Can Ethereum be used for smart contracts? ›

A "smart contract" is simply a program that runs on the Ethereum blockchain. It's a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain. Smart contracts are a type of Ethereum account.

Can Ethereum do smart contracts? ›

Ethereum provides a decentralized virtual computer — the Ethereum Virtual Machine (EVM) — on which developers can build applications consisting of multiple smart contracts. Think of the EVM as a distributed global computer where all smart contracts are executed.

How do I create an ERC20 smart contract? ›

Creating Ethereum ERC20 Smart Contract
  1. Step 1: Decide what you want your Token to be.
  2. Step 2: Code the Contract.
  3. Step 3: Test the Token on the TestNet.
  4. Watch the Custom Token.
  5. Verify the Source Code.

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