Blockchain

Smart Contracts

• The idea was introduced by computer scientist Nick Szabo in the 1990s. He compared a smart contract to a vending machine: insert the right amount, choose a product, and the machine delivers it automatically – no shop-keeper is needed to enforce the deal.
• Smart contracts became practical in 2013–2015 when Vitalik Buterin proposed Ethereum, a blockchain with a built-in, Turing-complete programming environment designed for smart contracts and dApps.
• A smart contract is “smart” because it executes itself; it is a “contract” because it encodes rules that all parties agree to in advance. It is not automatically a legal contract.

Life-cycle of a Smart Contract

Example : A Simple Solidity Contract

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

contract SimpleStorage {
    uint256 private storedData;                 // state variable kept on the blockchain
    event ValueChanged(uint256 newValue);       // log that front ends can listen to

    function set(uint256 x) public {            // changes state → needs a transaction (gas)
        storedData = x;
        emit ValueChanged(x);
    }

    function get() public view returns (uint256) {   // read-only → free when called off-chain
        return storedData;
    }
}

Practice code for Solidity is available in the course GitHub repository.

Properties of Smart Contracts

Use Cases and Limitations

Time-Line

• 1990s – Nick Szabo describes smart contracts (published in First Monday, 1997).
• 2009 – Bitcoin includes a limited, non-Turing-complete scripting language for spending conditions.
• 2013 – Vitalik Buterin publishes the Ethereum white paper.
• 2015 – Ethereum mainnet launches, enabling general-purpose smart contracts and dApp development.
• 2015 onwards – new blockchain platforms emerge, such as Hyperledger Fabric, R3 Corda and Stellar, with different contract models.
• 2020 – Ethereum’s Proof-of-Stake Beacon Chain launches; 2022 – The Merge completes Ethereum’s switch to PoS.
• Other consensus methods appear in different networks: Proof of Authority (PoA), Proof of History (PoH, used with PoS on Solana) and Proof of Importance (PoI, used by NEM).

Key Takeaways

Question / Answer (15 questions)

MCQ Test : Check Your Understanding (5 questions)

Select an option and press Check Answer, or answer all questions and press Submit Test to see your score. Each answer comes with an explanation.

Bibliography/References

The notes, questions and MCQs on this page are original explanations written for this course. The works listed below were consulted and are cited for attribution and further reading. Product names, logos and trademarks belong to their respective owners. Short quotations, where used, are marked and attributed.

1. Szabo, N. (1997). Formalizing and securing relationships on public networks. First Monday, 2(9). https://doi.org/10.5210/fm.v2i9.548
2. Buterin, V. (2013). Ethereum Whitepaper: A Next-Generation Smart Contract and Decentralized Application Platform. ethereum.org. https://ethereum.org/en/whitepaper/
3. ethereum.org. (n.d.). Introduction to smart contracts. Ethereum Developer Documentation. https://ethereum.org/en/developers/docs/smart-contracts/
4. Solidity Team. (n.d.). Solidity Documentation. https://docs.soliditylang.org/
5. Antonopoulos, A. M., & Wood, G. (2018). Mastering Ethereum: Building Smart Contracts and DApps. O’Reilly Media.
6. ethereum.org. (n.d.). The Merge. Ethereum Roadmap. https://ethereum.org/en/roadmap/merge/