Learn Smart Contracts
Your comprehensive guide to understanding, creating, and deploying smart contracts on the Hedera network.
Smart Contract Basics
Smart contracts are self-executing contracts with the terms directly written into code. They run on blockchain networks and automatically execute when predetermined conditions are met. Unlike traditional contracts, they don't rely on third parties for enforcement and create a transparent, immutable record on the blockchain.
Key Characteristics
- Immutable: Once deployed, they cannot be changed (unless specifically designed to be upgradable)
- Transparent: All transactions are recorded on the blockchain and visible to all participants
- Trustless: No need for intermediaries as the code guarantees execution
- Autonomous: Automatically executes when conditions are met
- Deterministic: Given the same input, they will always produce the same output
How Smart Contracts Work
Smart contracts are deployed on blockchain networks and stored as bytecode. When users interact with a smart contract, they send transactions that trigger specific functions within the contract. The blockchain's nodes execute these functions identically, reaching consensus on the resulting state.
Smart Contract Execution
- 1. User initiates a transaction to interact with the contract
- 2. Transaction is broadcast to the network
- 3. Miners/validators include it in a block
- 4. Each node executes the contract code
- 5. State changes are recorded on the blockchain
- 6. Events are emitted for off-chain notification
Common Applications
- • Decentralized Finance (DeFi)
- • Non-Fungible Tokens (NFTs)
- • Decentralized Autonomous Organizations (DAOs)
- • Supply Chain Tracking
- • Digital Identity Management
- • Decentralized Exchanges (DEXs)
Limitations to Consider
- Immutability Can Be a Challenge: Error-fixing requires carefully designed upgrade mechanisms
- Gas Costs: All operations have associated computational costs
- External Data Access: Smart contracts cannot directly access off-chain data
- Limited Computational Resources: Complex operations may be expensive or impossible
Pro Tip
When designing smart contracts, always consider how the contract will handle edge cases and unexpected inputs. Security should be a priority from the start.
External Learning Resources
Cyfrin Updraft
Free blockchain and smart contract development courses from industry experts
OpenZeppelin Contracts
Industry-standard library for secure smart contract development
Ethereum Documentation
Official guides and tutorials from Ethereum.org
Hardhat Tutorial
Hands-on tutorial for building and testing smart contracts
Ready to Apply Your Knowledge?
Now that you've learned the essentials, it's time to create your own smart contract.