How to Use Ethereum Smart Contracts

Smart contracts might seem like complex cryptocurrency jargon to contemplate, but in reality, it’s not. An Ethereum smart contract is an automated agreement between two parties written in code. Smart contracts have continued to bloom in the crypto space, and more is yet to come. One analysis shows that the wise contract market size might reach USD 345.4 million by 2021 at a CAGR of 18.1%.

Ethereum smart contracts have had a notable impact in revolutionizing the crypto space and the world at large. Furthermore, there are ways in which users can utilize Ether Smart Contracts. Some use cases include Decentralized Autonomous Organizations (DAOs), Decentralized finance (DeFi), the supply chain industry, etc. However, the Ethereum smart contract comes with its drawbacks. Nevertheless, here’s a brief introduction to what is a smart contract.

What is a Smart Contract?

A smart contract is a self-executing contract where an agreement between two parties gets embedded via code. By taking advantage of blockchain technology, smart contracts are entirely decentralized, distributed, and transparent.

In layman’s terms, a smart contract is an agreement set in code form, which can execute transactions between parties without the need for any intermediaries. The lack of intermediaries in intelligent contracts makes the concept function automatically.

The concept of intelligent contracts began almost two decades ago. Nick Szabo, a computer scientist, and cryptographer, first proposed the idea of smart contracts. Szabo described a smart contract as a set of promises that get specified in digital form. Thus, Szabo brought intelligent contracts to life. Also, his objective was to improve contract law practices for internet users.

Consequently, the smart contract model grew over the years. However, it only did so after blockchain technology came into existence. Bitcoin did utilize the support of smart contracts; nonetheless, Ethereum was the one that significantly cemented the use of smart contracts in real-world use cases.

Ethereum Smart Contract

Vitalik Buterin, the Ethereum founder, launched the blockchain in 2015. Their focus was mainly to address different limitations present in Bitcoin and particularly to enable the execution of short programs in the blockchain.

Ethereum leveraged the smart contract concept by finding better ways to build decentralized finance systems with apps running in the blockchain. They began by allowing users or applications to push arbitrary code in the blockchain using transactions. That’s the first time the concept of smart contracts came to light.

Ethereum Smart Contract Use Cases

Smart contracts have brought the emergence of exceptional use cases through their innovative smart contract feature. Some of these Ethereum smart contract use cases include:

Firstly, Ethereum made good use of smart contracts by unearthing decentralized autonomous organizations (DAOs). These organizations operate without any intermediaries. Smart contracts govern DAOs which are simply rules coded in the Ethereum software. What’s more, a community of stakeholders votes on their administrative decisions. Several DAOs have evolved to date, which are pooling user funds to offer grants to Ethereum entrepreneurs.

Secondly, Ethereum leveraged smart contracts to develop non-fungible tokens (NFTs). NFTs are indivisible and unarguably scarce digital assets that are revolutionizing the gaming, art industry. NFTs are also guaranteeing the origin of luxury goods. After the launch of CryptoKitties’ digital cat collectibles in late 2017, the NFT industry has grown rapidly over the years. Interestingly, NFTs have managed to draw an increasingly mainstream audience to cryptocurrency and blockchain technology. For example, the NBA is among the significant industries experimenting with NFTs.


Ethereum smart contracts have led to the innovation of Decentralized finance (DeFi). Unlike traditional finance, DeFi platforms are traditional financial products and services that have undergone reinvention. DeFi platforms use smart contracts to offer decentralized, programmable, and censorship-resistant features to transform financial products.

Ethereum smart contracts are vital in the supply chain industry. Smart contract technology can help a delivery system track its product, current state, and other essential details. These specific details would have been hard to acquire without using the Ethereum smart contracts or ledger system. Furthermore, Ethereum smart contracts can automatically aid merchants in ordering things in case of a shortage in supplies. This capability of smart contracts has established a significant impact in the supply chain benefitting large and small retailers.

Ethereum smart contracts can infiltrate the government, particularly for voting processes, a vital issue in governance. Transparency is the essence of voting, and smart contracts can assist voting systems in providing the latter. Smart contracts could eradicate politics and conspiracy around voting.

For example, it can easily trace votes and ensure that the results are as accurate as possible. Smart contracts can help voters participate through a secure online system. It will significantly improve the chance to pick an appropriate government party to power.

Lastly, Ethereum smart contracts could cement a revolutionary trail in the trade finance industry. Smart contracts could save parties a lot of time and money on manual paperwork.

Parties could leverage smart contracts to finalize transactions forehand, which can ultimately diminish any kinds of disputes in the future. On the other hand, if either party breaks the terms of the smart contracts, then financial intermediaries can intervene automatically.

Benefits of Ethereum Smart Contracts

Ethereum smart contracts naturally get rid of intermediaries, so the agreement embedded in it is between the parties only. It immediately provides anonymity to both parties as well as eliminates the risk of manipulation by third parties. As a result, both parties could save on costs significantly.

Ethereum smart contracts provide unlimited backup to all your documents. What’s more, a smart contract ensures the storing of records on blockchain experience duplication multiple times. Therefore, in the occurrence of data loss, originals get safely restored.

Finally, Ethereum smart contracts take advantage of cryptography to ensure that all documents are safe from infiltration.


Although Ethereum smart contracts have fortified a significant role in revolutionizing the world, they still have some drawbacks. For example, a notable one is the attack on Ethereum’s Decentralized Autonomous Organization (DAO) in 2016. The DAO’s fundraising smart contract has a vulnerability that hackers leveraged to stash funds from the project. Furthermore, it’s nearly impossible for a smart contract to pull information outside of the network it exists in. However, oracles could make it possible as databases move to the blockchain.

Ethereum live price
price change

Nonetheless, the Ethereum smart contract revolution proves it is here to stay. Increasing usability of Ethereum smart contracts supports the crypto space in reaching its full potential.

Stay up to date with our latest articles

More posts

Are Gold-Backed Tokens Worth Investing During Crypto Bear Market?

The crypto market is under the complete control of bears, investors taking short positions to profit from declining prices. In this unstable environment, new capitalists are fearful or skeptical when funding projects. Instead, they turn to more reliable assets that would not wipe out their portfolios when or if they flop. Gold-backed tokens represent a category of assets ready to provide portfolio stability and allow investors to overcome the bear market without too many losses. On the contrary, gold-pegged tokens…

The Buyback and Burn Practice Explained

In a constantly evolving and growing crypto market, it is difficult for investors to know where to put their money. One popular investment strategy in the crypto space is buying tokens of teams that conduct a buyback and burn program.  This guide will explore what a buyback and burn practice is, how it works, and its benefits and risks. What Is a Crypto Buyback and Burn Practice A crypto buyback and burn practice happens when a company buys back its…

Should You Sell Off Your Crypto Assets During a Bear Market?

Selling your crypto assets during a bear market can be a hard choice. On the one hand, selling off your assets may seem logical during a down market. On the other hand, you may be worried about missing out on potential profits if the market rebounds.  This guide will illustrate the benefits and risks of selling off your crypto assets during a bear market. While you should always do your own research, we will also share some tips for doing…

Why Do Some Crypto Projects Issue More than One Token?

In recent years, the popularity of cryptocurrency has exploded. As a result, more and more people are looking to invest in crypto projects. However, not all projects are equal, and it can be challenging to determine which ones are worth investing in. This guide aims to help investors make informed decisions about which crypto projects to invest in. It will explain multi-token models and why they have become so popular among crypto projects.  The guide will also outline the benefits…

How to Spot a Crypto Project with Great Tokenomics?

In the cryptocurrency world, there are a lot of projects with amazing tokenomics. However, it can be challenging to determine which projects are worth investing in.  This guide will help you spot a project with great tokenomics. In this way, you can make a great decision about where to invest your money.  Before analyzing the technical components of tokenomics, there are other red flags you should be able to spot. Our guide will begin with this premise and then move…

A Guide to the Signs that a Crypto Project is About to Fail

Cryptocurrencies are digital assets and a payment system invented by Satoshi Nakamoto. They use cryptography to secure their transactions and control new units' creation. Cryptocurrencies are decentralized, not subject to government or financial institution control. Bitcoin, the first cryptocurrency, appeared in 2009. With the rise in popularity of cryptocurrencies, there has also been an increase in crypto projects that end up failing.  This guide will explore the signs that a crypto project will fail. By understanding these signs, you can…

An Easy Guide to Initial Gaming Offerings (IGO)

Initial Gaming Offerings, or IGOs, have been gaining in popularity as of late. This guide will explore the ins and outs of IGO investing. The aim of this post is to help you make informed decisions about this investment opportunity.  We'll cover everything from what they are and how they work to the benefits and risks associated with them. At the end of the guide, you will find it easier to assess IGOs on the market. What Are IGOs, and…

Initial Metaverse Offerings (IMO) – A Beginner’s Guide

Initial Metaverse Offerings (IMO) allow businesses to raise money by issuing tokens on the blockchain. IMO offer investors a chance to get in on the ground floor of exciting new projects. Through an IMO, you may provide businesses with the capital they need to get started.  This guide will explore what IMO are, how they work, and what you need to know before investing in one. What Are Initial Metaverse Offerings (IMO)? Initial Metaverse Offerings are a way for blockchain…

Top 5 Crypto Portfolio Trackers To Use in 2022

An active cryptocurrency trader cannot do without the support of a crypto portfolio tracker. Not if they want to be successful at trading or investing. A crypto portfolio tracker is an app enabling you to monitor the amount and value of your crypto assets across all wallets, exchanges, platforms, and blockchain networks in real-time. It allows you to track historic transactions, live crypto prices, gains, and losses. Above all, it prevents you from mismanaging your portfolio while getting the best…

Five Gold-Backed Crypto to Consider in the Current Inflationary Economy

Many traders are optimistic about the blockchain's development potential and recognize that volatility is inevitable with new technology. Some are asking how to invest in digital assets while maintaining some degree of stability. A relevant part of investors frequently mentions stablecoins as a valid investment alternative. Anchoring the value of crypto to a fiat currency can undoubtedly sound appealing. However, fiat money depreciates as inflation increases, making stablecoins less valuable. In this particular context, the crypto market is offering a…