How to Make a Smart Contract on Ethereum: Business Guide for Beginners

The blockchain is the revolutionary tech powering Bitcoin. Being the first successful implementation of blockchain, Bitcoin is now widely adopted to handle payments. However, Ethereum has opened up new opportunities for blockchain technology. This happened with the introduction of creating and deploying smart contracts.

This guide explains how to create smart contracts in an easy-to-understand way, so you can start creating them without any difficulties. It’s an excellent first step for beginners, especially who are running their startup blockchain business or entrepreneurial people who wish to start a business.

What are Smart Contracts?

Smart contracts are automatic self-executing agreements encoded into a blockchain. Because blockchains are immutable, they ensure that smart contracts automatically implement the terms of the set agreement immediately the encoded conditions have been met. Today, smart contracts are used in various industries including legal, gaming, and metaverse technologies.

Reasons To Integrate a Smart Contract With Your Business

Integrating a smart contract with your business can potentially save costs and time while creating transactions trust. Smart contracts have recently gained a lot of popularity in the cryptocurrency world, with some experts predicting that they will become an alternative to traditional legal contracts.

Create your own crypto tokens

Cryptocurrencies are all about value transfer, which means that they need to be exchangeable for other currencies or goods and services. You can make your own crypto token using Ethereum’s ERC-20 standard, which allows you to build digital tokens on top of Ethereum or any private blockchain. The tokens can then be traded between users on digital markets without any centralized control or interference from third parties. Businesses that deal in fintech or gaming can use tokens to enable user trading and funds transfer.

Raise Funds on the Blockchain

Smart contracts allow businesses to raise funds through initial coin offerings (ICO). This is an effective way to raise capital without going through traditional methods such as venture capital investments or crowdfunding platforms. This makes it easier for small companies to raise money from investors all over the world without having to pay commissions or fees associated with traditional fundraising methods.

Transform your company into a DAO

A DAO (Decentralized autonomous organization) is an organization that operates on rules encoded as smart contracts in a blockchain. Many entrepreneurs decide to create Decentralized Autonomous Organizations because they allow businesses and users to bypass the hegemony of big tech companies like Facebook and Google they often take decisions that don’t favour their public audience. If the audience has greater say in how businesses run, as DAOs promise, better decisions can be made without intrusion from overzealous investors and founders.

Develop decentralized applications (dApp)

Using smart contracts, you can easily create a blockchain app, otherwise known as a decentralized app through Ethereum, Cardano, Solana, Hyperledger, Ganache, etc.. The dApps enable your customers to interact directly with each other without middlemen or third parties. Thus, you could eliminate several layers of bureaucracy and reduce costs associated with operating your business. You can also give customers more control over their data and privacy – increasingly important issues for consumers.

Encoding Financial Agreements

A smart contract empowers you to define a set of rules to be fulfilled before any transaction is made between parties. It is a secure way of conducting transactions while keeping all parties accountable for their actions. The blockchain uses cryptography to ensure that all parties follow the rules of the agreement. This makes it more straightforward for individuals or businesses to implement complex financial agreements without relying on lawyers or other third parties.

Secure File Storage

A smart contract is an immutable ledger that records all transactions as they occur on the blockchain network in real-time. So, there’s no need for third-party verification or intermediaries like banks or lawyers. As such, documents such as property title deeds, medical records, and insurance claims can be safely stored on a secure public or private server instead of in physical form, making them more secure against theft or loss due to natural disasters or human error.

Ethereum as a Platform for Creating Decentralized Apps

Imagine if you could easily build a vending machine, and then somehow host it on the Internet. You could choose to make it available for free or charge a small fee for each use. Users would load their coins and then buy anything from the vending machine: candy bars, soda cans, etc. When you set up a smart contract with Ethereum, that’s how it works. This requires a combination of the Ethereum Virtual Machine, Solidity (or other programming languages), and blockchain ‘gas’.

Ethereum Virtual Machine

There is no how to develop a smart contract without the Ethereum Virtual Machine (EVM), a programmable decentralized computer built on the Ethereum blockchain. It can execute code written in languages that compile down to EVM bytecode (e.g., Serpent). This includes Solidity and Serpent, which are high-level languages specifically designed for writing smart contracts. The EVM is a stack-based byte code execution engine (rather than a register-based architecture) that allows for the fast execution of smart contracts.

Solidity

Solidity’s high-level syntax is similar to that of JavaScript and it is developed specifically for writing smart contracts on Ethereum Virtual Machine (EVM). A Solidity smart contract can be written using a text editor or using any IDE like Remix (which is built into web3j). It was designed with simplicity, readability and minimalism in mind, while still being expressive enough to deliver complex solutions as required by real-world use cases. Solidity also has excellent support for testing and debugging thanks to its built-in logging functions, assertions and other features that help prevent bugs from creeping into production systems.

Gas

Gas is the internal unit of account within Ethereum. It represents the amount of work that action requires from the network per unit of time. When a transaction or contract is executed, it consumes a certain amount of gas which must be paid for with ether (ETH). Gas price increases proportionally to the computational complexity of each transaction so users pay more if they want faster transactions. Every smart contract has its own gas limit which specifies the maximum amount of gas allowed per block before failing execution due to insufficient funds.

Top Smart Contract Business Ideas Promising to Raise in the Future

Smart contract technology has always been on the radar of investors. Due to advanced technology, business opportunities can easily arise. This section contains smart contract business ideas that can be worthwhile to consider in the future:

Supply Chain Management

Companies like IBM and Samsung deploy smart contract on Ethereum to improve their supply chain management systems. It allows them to track every step in their production processes, from raw materials to shipping and delivery. This helps them improve efficiency and reduce costs by preventing losses due to product defects or delays in delivery times.

Healthcare Data Management

It is another area where smart contracts can prove useful. For example, Estonia has implemented a national healthcare database based on the blockchain to tokenize medical records securely and make them available to patients when needed. Smart contracts help to manage patient data securely across different health care providers (doctors) and insurance companies (payers).

Insurance Smart Contracts

Smart contracts can be used in insurance policies for automatic claims administration and reduce fraud. With blockchain technology, it is possible to create an immutable record of all transactions related to an insurance policy including claims payments and premiums paid by policyholders. This creates transparency for both policyholders and insurers, reduces fraud and makes it easier for policyholders to manage their finances.

Toolkit You Need to Develop a Smart Contract on Ethereum

When you develop a smart contract on Ethereum, there are some must-have development tools. For example, solidity programming language, Truffle (or remix), Etherscan, and so on. This tutorial section introduces the major tools for an Ethereum smart contract.

Frameworks: Hardhat or Truffle

Both frameworks provide the basic building blocks needed to write a smart contract, including testing frameworks, console commands and developer tools such as IDEs. Hardhat uses its own parser and compiler while Truffle uses Solidity’s parser and compiler. Because Truffle relies on Solidity’s compiler directly instead of its own parser and compiler, it can be slower than Hardhat because it has to parse the entire source file each time you compile it — whereas Hardhat only needs to parse individual lines as needed when compiling them into bytecode.

Wallet: Metamask or Gnosis Safe

A wallet is a key component of your setup in how to create a smart contract on Ethereum. It is a piece of software that is used to manage your Ether and other tokens. There are several different types of Ethereum wallet but we recommend using Metamask or Gnosis Safe which both enable direct interaction with the blockchain from your browser without having to download the full node.

Block Explorer: Etherscan or Etherchain

A good block explorer should be able to show you details of transaction hashes, fees, and block heights. Developers also use them to search for other related information such as address, balance, etc.

IDE: Remix or EthFiddle

These are online IDEs for writing smart contract code and testing it locally before uploading it to the blockchain; EthFiddle does not require installation and uses Javascript as a programming language, while Remix needs to be installed on your computer but supports multiple programming languages (including Solidity).

Cost & Timeline

To fully understand how to build a smart contract, you will have to cover the cost of the standard fee for every platform and protocol of your choice. This idea will help you analyze both the cost and timeline to make a smart contract on Ethereum.

How Much Does It Cost to Build a Smart Contract

The total cost of developing a blockchain-powered smart contract is about $2,500 for simple projects. A more complex project with multiple participants can reach $50,000 or more. However, if your application is complex with multiple modules and functionalities, then it will cost more than $200,000. If you are looking for a specific estimate for smart contract development, then it is hard to give one as each project has different requirements.

You can save time and money when you hire an outstaffing company to assemble a team for you. It is, even more, cost-effective to use a foreign outstaffing company with an excellent track record of product delivery and reliability. At ProCoders, for example, our typical development process could take between 2 and 6 weeks, depending on the requirements and tools involved in this way, we help our customers optimize costs to find crypto developers.

How Much Does It Cost To Deploy And Launch A Smart Contract On Ethereum 2023

The cost of deploying and launching a smart contract on Ethereum is likely to vary based on the complexity of the contract. However, the average cost per transaction is $0.0015 – $0.0025 depending on the gas price. This means that for every 10,000 transactions, you can expect to spend around $150 – $300 in fees. The cost of deploying a smart contract will also depend on how quickly you want to get it live. If you want your smart contract up and running quickly, then it will cost more than if you can wait hours or even days for it to go live.

How To Create a Smart Contract in 5 Steps

In this section, we present to you a five-step plan that will allow you to create a smart contract on blockchain effortlessly.

Start with a business idea and discovery phase

The discovery phase helps project stakeholders to understand the problem that needs solving and the potential application for blockchain technology. At this stage, it’s important to determine the budget, strategy, tools, and infrastructure required. In achieving that, collaborating early in the process with an outstaffed team like ProCoders will help you to effectively determine how your smart contract will be deployed as you execute how to hire web3 developers.

Create a token template in Solidity

This is a sample code that you can use as a reference when creating your own contracts. This code does not actually create any tokens, it only serves as an example of how to implement certain features into your smart contract.

Compile and deploy it on Ethereum Testnet

Before deploying your smart contract on the main network, you should test it out on the Ethereum test network first. This way, you can be sure that your contract will work as expected when deployed on the live network. Testnet is similar to Mainnet but has less traffic so it’s easier to test things out without worrying about making mistakes or affecting other people’s business processes by mistake.

Create a basic user interface for your DApp

A user interface (UI) is an essential part of any DApp because it allows users to interact with your smart contracts through their browser or mobile device. The easiest way to create an interface as you make your own smart contract is by using web pages hosted by Etherscan; however, there are other options available such as OpenZeppelin’s UI library or Truffle’s Embark framework which provides a user-friendly Javascript interface for developing DApps with Truffle’s testing framework integrated into it.

Deploy your contract on the main Ethereum network

Now that you have created your token template, the final step to create your own smart contract is that you need to deploy it on the main Ethereum network and use it as an ERC20 token contract. This will allow anyone who wants to use this token to send Ether to this address, which will trigger the creation of new tokens in return and send them back to the sender’s wallet. The amount of gas needed depends on how complex your smart contract is and how many computations it needs to complete. You can use MyEtherWallet or Etherscan to determine how much gas is needed for deploying your contract successfully.

Create and Deploy Your Own Smart Contract With ProCoders

ProCoders is a software development outstaffing company with a team of skilled developers who have experience working on blockchain-based applications. We believe that Blockchain is the next big thing in technology and we are helping companies build a smart contract platform on top of it.

ProCoders’ developers are highly experienced and selected through high-powered technical interviews and tests. Due to our years of experience working with remote teams across the globe, the developers and engineers in our team are deeply integrated into the remote work culture and find it easy to integrate quickly with clients’ in-house teams for project efficiency. More so, during our interviews, we do not hire candidates who can merely code but instead those who, with their high coding skills, have an architectural mindset and demonstrate that they are capable of value delivery. We believe developers need these all-round capabilities to be effective in their jobs.

In designing smart contracts, our tech stack includes the emergent technologies like Solidity, Node.js, TypeScript, PHP, Infura, Ropsten, etc. We use agile methodology and test-driven development practices while building your project so that you can get high-quality results at an affordable cost. Therefore, right from research and development stages, businesses can explore adding more features without taking up too much extra financial costs.

Conclusion

• Smart contracts are secure and transparent, making them an ideal option for businesses that want to make their transactions more efficient and cost-effective.
• Understanding the steps involved in how to make a smart contract can make it easier for your company to design a part way to implementing your business ideas to take advantage of blockchain technology.
• When you make an Ethereum smart contract, there are some development tools you need to have. This includes the Solidity language, programming frameworks like Hardhat or Truffle, a crypto wallet such as Metamask, and so on.
• The total cost of developing a blockchain-powered smart contract is about $2,500 for simple projects with one or two parties. A more complex project with multiple participants can reach $50,000 or more.
• At ProCoders, we believe that Blockchain is the next big thing in technology, and we are helping companies build their solutions on top of it through dedicated outstaffing.