How to Design a Highly Scalable Smart Contract on the Ethereum Platform

What is the difference between a contract as you know it and a smart contract – the one powered by blockchain? Unlike centralized businesses that depend on middlemen to draw up and execute contracts, the blockchain technology aims to put the power in your hands. Smart contracts were devised as a blockchain-based (read decentralized) alternative to the conventional contract model.

What then is a smart contract?

Unlike traditional contracts, smart contracts are digital. They are represented by small computer programs that are stored inside a blockchain. These programs contain standard rules for negotiating business terms and conditions, verifying fulfillment of these terms, and then executing the terms that have been agreed upon. What smart contracts aim to do is to bring the agreeing parties in direct contact/communication with each other so that there’ll be no need for a middleman.

A smart contract basically works like any other software. The instructions behind the program contain certain terms or conditions that will only be executed when specific actions are completed. What this means is that, every code has a trigger which would set it in motion and the outcome of that run would in turn be the trigger for the next set of events.

Scalable smart contracts and Ethereum

Many contracts include the same repetitive terms and conditions based on the code that doesn’t need to be rewritten each time you start developing a new contract. On the other hand, the terms and conditions may change with time. That’s why smart contract consultants from Itransition advise to develop scalable smart contracts – those that can be adapted for various financial applications and can also be subject to a significant amount of updates per time.

Today, one of the most mature platforms for creating smart contracts is the Ethereum framework. Designed specifically to support smart contracts, Ethereum can run several of them at the same time without any risk of fraud, downtime, or even external interference. In other words, Ethereum has got you covered.

How to overcome the scalability problems on Ethereum

Currently, as decentralized business transactions continue to increase in volume, user account information begins to pile up, and its storage becomes extremely complex. Maintaining this function while working to attract more users might make it increasingly difficult to scale smart contracts. Even though developers have devised various technical solutions to the scaling problem, there a few potentially efficient methods that have not yet been discussed. They include:

  • Sharding: This technique adopts the principle of a popular concept in data architecture, database sharding.

Because account information is stored in individual nodes on Ethereum, managing all that information while trying to call up different smart contracts simultaneously makes scaling difficult. However, if this information is broken down into smaller sets (containing relevant information to call up a particular contract), it will be easier to manage. If a particular node doesn’t have all the information it needs, there will be a piece of code directing it to call for another node that does.

  • Off-chain transactions: What this technique aims to do is to reduce the burden on the blockchain underlying the payment channel. This means that some transactions can be made “off-chain,” through other smaller payment channels. The good thing about this solution is that there is an instruction that allows both parties to direct the transaction back to the blockchain if they need it.

If these solutions are adopted and inculcated into the design process of smart contracts, it will greatly reduce the scalability problems the Ethereum framework is currently facing.

So now that you have some information, you may want to get on with the design process.

Designing the Smart Contract on Ethereum

Before we get right to designing a smart contract, here a few things you need to know about first:

    • Ethereum Virtual Machine. Even though this sounds like some military grade surveillance equipment, all it does is interpreting assembly language. Because it’s a little more limited than other virtual machines in its functions, Ethereum needed to develop a programming language specially for it.
  • Solidity: the programming language upon which all Ethereum smart contracts are built.
  • Gas: payment made to miners for the execution of a smart contract.

Now let’s get right to building a smart contract. In order to execute a smart contract on Ethereum, one needs to have the following tools:

  • Truffle: This is a framework for developing and testing smart contacts. It is written in JavaScript and it holds the compiler for the Solidity programming language.
  • Parity: Parity is an Ethereum client. It provides a fast and secure way of interacting with the Ethereum blockchain


Once all these tools are in place, designing a scalable smart contract on Ethereum will require 3 basic steps:

  1. Defining the two possible parties. Every contract requires two parties, therefore we need to identify and define these two parties: the buyer and the seller. For the seller who performs a task and gets paid for it, we have to create a chunk of code through which they would be paid.

Once the seller has shipped goods, they can initiate the payment process in one click using this feature. After writing the necessary code in Solidity, the developer has to run it through truffle to check whether it’s correct or not. If it doesn’t pass the test, then they have to go through the code again.


  • Creating a channel that would enable a buyer transfer funds to the smart contract. The smart contract is the channel through which the buyer sends funds and the seller receives them. In order to add this function to the code, the developer has to edit the initial code file. In the code, they should also specify that only a seller can transfer funds to the contract. After creating those boundaries, the developer will need to write the code that will enable the buyer make the transfer.


  • Enabling the seller to receive money from the smart contract. A deployer has to be inculcated into the smart contract software so that once confirmation is received it initiates fund transfer to the seller. The software should make sure that the payment function is terminated once funds have been deployed.



The potential for the use of smart contracts is huge, and they can revolutionize so many industries (banking, real estate, healthcare, etc.). In this article, we’ve talked about basic steps one needs to take to design a smart contract, but you can also make yours more complex and add some extra features to it.


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