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How to Create A Smart Contract in 2024? — A Definitive Guide by QIT

Mar 14, 2023 12 min read
"How to Create A Smart Contract in 2024? — A Definitive Guide by QIT"

Smart contracts are important building blocks for products in the field of cryptocurrency and blockchain. These digital analogues of traditional contracts are used in many consumer cryptoproods. For example, with their help, NFT, decentralized exchanges and stabelcoins function, so it is likely that you have already used them. In this article, we will tell more about this concept and learn on how to build a smart contract.

What is a smart contract?

Smart contract is a way to perform a transaction after the event checked, for example, such as a payment. In this article, we will talk in detail about what a smart contract is, how it works, and what types of it are most common.

The smart contract reflects the conditions of the upcoming digital transaction, as well as possible fines for non -compliance with these conditions, the digital signatures of the two sides of the transaction are recorded.

When fulfilling the obligations, it must determine whether all the specified terms of the transaction were executed, and make a decision-to finish the transaction and issue reserved funds (which can act as cryptocurrency, money, shares, etc.), or apply to one of the participants Virtual transaction penalties.

Smart contracts are the fundamental construction blocks of the blockchain and crypto space. They began to become in demand with the development of blockchains, especially with the advent of Ethereum-one of the most popular blockchains that support smart contracts.

What are the advantages?

Some potential advantages of smart contracts include, among other things, automation, transparency and safety. The risks of smart contracts may include weak regulation and potential vulnerability.

Today there are an infinite number of real options for using smart contracts, including finances, supply chain and much more.

Smart contract: an example of use on the Ethereum blockchain

You can consider the digital method of fulfilling contracts, as an example by taking a smart contract based on Ethereum. Each contract is identified by a unique address. The terms of the contract are registered in the code, and after the contract deployment in the blockchain, the contract code cannot be changed.

Smart contracts are made by blockchain units as a result of processing transactions sent by the user (for example, when exchanging tokens).

Blockchain nurses are devices such as computers that authorize and check transactions and act as a center of communication with other nodes on the network.

Then these transactions are carried out by each blockchain node in the network to check their output data. If all nodes confirm this, the condition of the contract is updated accordingly. The transactions are automated and performed automatically using a code, which, if everything works according to the plan, eliminates the need for a third party to fulfill the contract.

Depending on the transaction that he receives, the contract can perform various functions, including reading or writing in his personal storage, storing money on the balance sheet of his account, sending or receiving messages or money from users or even creating new smart contracts. Similarly, the Bitcoin smart contract works.

Smart contracts “anatomy”

smart contract structure

Smart contract in its core is a program consisting of data and functions that can automatically be executed when receiving a transaction in the blockchain. What does the smart contract consist of?


Any contract data must have a location – either in the repository or in memory. Data can be the number of tokens, conclusions of functions, and so on. Changing the repository in the smart contract of cryptocurrency is expensive, so the developer needs to decide in advance where the relevant data should be stored.


They determine actions for execution or a general business logic. Simply put, functions can receive or set information in response to incoming transactions.

In smart contracts, there are two types of function calls: internal and external. Internal functions and conditional statements can only be accessed from within the current smart contract or from contracts derived from it. On the other hand, external functions are part of the contract interface and can be called from other contracts or through transactions.


Events inform the services outside the blockchain, such as decentralized applications (Dapps), to notify users about the current state of the contract or the event. They are similar to functions, they also accept and retain arguments, but events about events are saved in the transaction log that are not available for smart contracts.

Events can be called or sent using the key word “EMIT”. Although events and magazines are technically part of smart contracts, it is important to note that smart contracts cannot read data about events.

In simplier words

The smart contract acts according to a similar principle, only its “mechanism” is registered in the form of a computer code that triggers certain actions (functions, operations, transactions, algorithms) when fulfilling pre-prescribed conditions and instructions. The conditions and instructions act according to the logic “if → then”:

  • If the smart contract received an object A (for example, 1 bitcoin), then the one who gave the smart contract object A will receive object B (for example, 16 broadcasts);
  • If the smart contract received object B, then the function X will be launched (for example, reproduction of animation, music, a movie or a series);
  • If the smart contract received an object C, then the one who gave the smart contract object C will gain access to some application.

Such smart contracts can be developed and deployed on various blockchain platforms (for example, Ethereum, Cardano and Hyperledger Fabric). Each platform has its own characteristics of the work and development of smart contracts. However, usually all smart contracts consist of two different parts: code set and some data. The code is the functions of the contract, while data are considered a state. These two components of the smart contract are on a specific address in the blockchain.

It is also worth noting that smart contracts, as a rule, are a type of account with the same rights as user accounts. Only in the case of smart contracts, their accounts are not controlled by users-the account of the smart contract is controlled by the code inside the contract itself.

This is important because due to the fact that smart contracts are accounts, we, as blockchain or Dapps users, can interact with smart contracts. For example, we can send tokens to a smart contract to exchange them for other tokens (as in the case of an exchange of cryptocurrency with a person) or so that the smart contract performs some other instructions / function.

Three varieties of smart contracts

Smart contracts are usually divided into three types. Let’s study them to find out what benefits they can bring.

Smart legal contract

These are smart contracts based on a correctly issued legal agreement, therefore its counterparties bear legal liability for the implementation of the terms of the contract. Moreover, this can be either a smart contract for transferring cryptocurrency to a fiat, or a smart contract for registering an apartment.
Most of the existing smart contracts are Smart Legal Contract. They are the basis of cryptocurrency exchanges, Defi projects, GameFi projects and a variety of blockchain-based platforms-from NFT marketplaces to metavseli and areas for the tokenization and sale of real real estate.

Decentralized autonomous organizations (DAO)

Decentralized autonomous organizations, or DAO can be defined as communities that are controlled by a set of rules adopted and codified using smart contracts. After the adoption of these rules, the work of the DAO smart contracts will be to ensure their compliance and provide legal protection mechanisms, as well as the punishment of violators. In other words, DAO smart contracts are laws and a “digital” bureaucracy.

Examples of DAO smart contracts are the Decentraland, Uniswap, Polkadot and MakerDao control protocols. According to the rules of these projects, the management of their native tokens are given by them, who can put forward various proposals (for example, determine the structure of the commissions, change the blockchain code, add and / or delete parachans) and vote for them. DAO smart contracts are responsible for voting and votes.

Application Logic Contracts (Alc)

This kind of smart contracts work under the control program, and their main task is to ensure the interaction between this program and the blockchain. For example, ALC is responsible for integrating the Internet of things with blockchain or for the ability to use your NFT as a game character in the game Spider Tanks. In addition, ALC can also be responsible for the connection of blockchain with oracles.

How to build a smart contract?

Now that we explained the concept, the purpose of use and advantages of blockchain-based agreements, let’s analyze how to develop a smart contract for the needs of your application or business.

Currently, Ethereum blockchain is the most popular and convenient platform for creating smart contracts, as it allows the developers to implement their own contract scenarios.

Ethereum can create and run any program on the main features of blockchain, using smart contracts to automatically fulfill the conditions. If the conditions are fulfilled, the contract will automatically work without the need to take additional actions.

The contract is written in a particular programming language, Serpen or Mutan, compiled in EVM and usually meets the ERC-20 standard. On the network you can find a lot of guides on how to write smart contracts that can be explained even by newcomers.

Partner with us to create secure and efficient smart contracts

Partner with us to create secure and efficient smart contracts

Smart contracts help reduce costs, increase efficiency, and eliminate intermediaries. Learn more about the smart contract development services we provide and write to us for a free cosnultation.


There are two levels of smart contracts:

Smart Contact Platform (SCP). It is an infrastructure that allows them to be created and operated on blockchain;

Smart Contract Management System (SCMS). This protocol is added to the platform to simplify the interaction of the user with contracts. That is a graphic interface.

The contract is performed on the network, inside the virtual machine Ethereum (EVM). Its execution is paid by “gas” – a small amount of Ethereum, which is introduced by one or more sides of the contract.

Please note that the execution is decentralized and is carried out at all network nodes. This is one of the reasons why EVM is so slow and can handle no more than 15 transactions per second.

If you do not want to dive with your head in the programming, then you can use the services of platforms that we provide users with a smart contract designer. It can help you quickly create a smart contract ICO without special knowledge or with only surface.

After writing a smart contract, its formal verification is needed, which will make sure that everything works as the developers conceived.

How to implement a smart contract?

The smart contract can be implemented with the help of replicated records, while the contract is made through Merkel wood.

Each P2P network knot acts as a register of trust and guarantee. It changes the contract owners and automatically checks the rules imposed by the transaction and checks the work of other units.

Cryptocurrencies such as BTC have implemented special cases for those records or nodes where the property and the core of the transaction are money. BTC and many derivatives contain more generalized mechanisms for property rights and contracts. Code is a very important part of BTC based on the replication of the final machine.

Step 1: Choose a platform

The first step in creating a smart contract is to choose a platform. The two most popular platforms for creating smart contracts are Ethereum and EOS. Ethereum is the most widely used platform and has a more extensive developer community. EOS, on the other hand, is a newer platform that offers faster transaction times and lower fees.

Here are the six most popular platforms for the development:

Execution environmentProgramming languageTuring completenessPermission typeConsensusTPS
EthereumEVMSolidityYesPublicPoW (PoS expected)~ 14 – 27
PolkadotPEEDepends on a chainDepends on a chainDepends on a chainNPoS~1,000 (100K with multithreading)
HyperledgerDockerJavaScript, GoPrivateCFT~3,500
TezosTezos VMMichelsonYesPublicPoS~ 40
StellarDockerNet, Scala, C++, GoNoConsortiumFBA (SCP)~ 1,000
SolanaLLVMC, RustYesPublicPoH and PoS65,000 max

Step 2: Choose a programming language

As in the case of blockchains, there are also several tools that the developer can use to create a smart contract. All of them are divided into subgroups, depending on the purpose of their use. Some of these technologies are required (for example, you cannot create a smart contract without using a programming language). The rest are not obligatory. Ethereum uses Solidity, which is a high-level programming language specifically designed for creating smart contracts. Solidity is similar to JavaScript and is relatively easy to learn. EOS, on the other hand, supports several programming languages, including C++, Python, and JavaScript.

Here we tried to mention all the tools that are popular and widely used by smart contract developers.

Programming languages. The choice of the programming language almost always depends on the chosen blockchain. Solidity, C++, Go, Rust, JavaScript, C, Vyper, DAML
IDEs. These environments help to write and test the code. They can be within networks (they don’t need to be installed) or desktop. Remix, SettleMint, EthFiddle for Web, Atom and Visual Studio Code for Desktop
Frameworks. They are used for more effective testing and deploy. The choice of framework depends on the preferences and experience of the developer.Truffle, Hardhat, Brownie, DappTools, ApeWorX
Testnets. We need them to place smart contracts within the controlled environment to test if they behave as expected. Rinkeby, Kovan, Ropsten, Goerli, Hyperledger Umbra
Crypto wallets. Crypto wallets that support smart contracts give access to DApps and Web3 for testing protocols.Metamask, Trustwallet, Coinbase, AlphaWallet, Binance Chain Wallet, Enjin

Step 3: Write the smart contract code

Once you have chosen your platform and programming language, you can start writing your smart contract code. A smart contract is essentially a piece of code that executes a specific set of instructions when certain conditions are met. The code is typically written using a text editor, and once you have written the code, you will need to compile it into bytecode. Every blockchain has its own tools. Ethereum, for instance, often uses OpenZeppelin.

Step 4: Test the smart contract

Before deploying the smart contract, you should thoroughly test it to ensure that it is working correctly. This is done by running the code through a series of simulations to identify any potential errors or bugs.

Step 5: Deploy the smart Contract

Once you have tested the smart contract, you can deploy it to the blockchain. This is done by sending a transaction containing the bytecode to the blockchain. Once the transaction is confirmed, the smart contract will be deployed, and its code will be stored on the blockchain.

Step 6: Interact with the smart contract

Once the smart contract is deployed, you can interact with it by sending transactions to it. These transactions can be used to execute the instructions contained within the smart contract, such as transferring tokens or updating data.

Interesting facts

The algorithmic side of the issue

Now let’s try to talk about the technical side of the implementation of smart contracts on the example of the Ethereum blockchain. What does the process of writing, publishing and performing a contract of contract look like?

Writing, publishing, and executing smart contracts on Ethereum

  • Solidity language is used to write smart contracts on Ethereum.
  • Smart contract code is executed in the Ethereum Virtual Machine (EVM).
  • Gas is introduced to limit resource consumption and prevent endless cycles in smart contracts.
  • Contracts can perform various operations and consume gas, which is paid in cryptocurrency.
  • Trigger of the contract is a transaction.
  • Fuel consumption limit is imposed to prevent errors and uncontrolled consumption of cryptocurrency.

Challenges in smart contract environment

  • Smart contract environment is different from the traditional environment.
  • Errors can be expensive, operations are costly and slow.
  • Updating the contract is difficult and requires convincing parties to use the new contract.
  • Building a real-life system on smart contracts requires understanding these limitations.

Technology perspectives

Smart contracts are becoming more and more popular as more and more people are beginning to understand and trust blockchain. Subsequently, smart contracts can cover more areas of activity where there is a financial component: loans, insurance, investment, rent, etc. All this can be prescribed in blockchain.

Some opponents argue that blockchain is not 100% safe. But do not forget that IT infrastructure in an average bank is also prone to hacker attacks and data leakage. Therefore, it is very difficult to say that blockchain is more vulnerable and does not deserve trust.

In addition, smart contracts could find use at the state level. Blockchain transparency can reduce corruption as anyone can track the transaction address. On the other hand, such free monitoring of smart contracts limits their use in situations that are important.

They are also not suitable for concluding non-monetary agreements. For example, if the two parties exchange services and the contract does not provide for monetary sanctions on a party that has not fulfilled its part of the agreement.


Implementing a smart contract can provide numerous benefits for businesses, such as increased efficiency, transparency, and security in their transactions. By choosing the right platform, programming language, and tools, businesses can create customized smart contracts that fit their specific needs. With the increasing popularity and trust in blockchain technology, adopting smart contracts can also demonstrate a commitment to innovation and staying ahead of the curve in the industry.

Moreover, by using smart contracts, businesses can potentially reduce costs associated with intermediaries and middlemen, leading to increased profitability. It can also help establish trust with customers and partners, leading to stronger relationships and increased loyalty.

Ethereum and EOS are two of the most popular platforms for creating smart contracts, and Solidity is a high-level programming language specifically designed for creating smart contracts. Once the smart contract code is written, it needs to be thoroughly tested before it can be deployed to the blockchain. Smart contracts have their limitations and challenges, but they are becoming more popular as more people begin to understand and trust blockchain. If you need to build smart contracts, contact us today for a free consultation.