{"id":12494,"date":"2022-08-16T16:29:00","date_gmt":"2022-08-16T16:29:00","guid":{"rendered":"https:\/\/hederav2stg.wpenginepowered.com\/learning\/smart-contract-challenges\/"},"modified":"2025-12-04T22:15:21","modified_gmt":"2025-12-04T22:15:21","slug":"smart-contract-challenges","status":"publish","type":"learning","link":"https:\/\/hedera.com\/learning\/smart-contract-challenges\/","title":{"rendered":"Smart Contract Challenges"},"content":{"rendered":"

Since the rise of blockchain technology, smart contracts have been sweeping the digital world. Smart contracts execute automatically and have the potential to increase equity by using a peer-to-peer network<\/strong> to store contract information and act on it more efficiently than traditional methods. There can be no adjustments or bribery in this system, only code. High-quality smart contracts<\/strong> also have the potential to reduce transaction costs by removing unnecessary intermediaries from contract development and execution. However, along with all the potential, there are considerable smart contract challenges.<\/p>\n

Industries are turning to face and embrace smart contracts as a new tool to increase accuracy and reduce fees<\/strong> for many of their agreements. Logistics and shipping, insurance, charities, agriculture, healthcare, energy, and the financial sector are all adapting to smart contracts. In agriculture, they can be used to trace products from farm to table. In logistics, smart contract execution helps to drive supply chain management. <\/p>\n

But smart contracts are far from ubiquitous. From the intricacies of coding to the exchange of tangible goods, many issues need to be remedied before we can expect to see smart contract development<\/strong> on a universal scale. Let\u2019s explore the primary issues they face and where researchers can propose solutions. <\/p>\n

What are the main smart contract challenges?\u202f
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Security and privacy\u202f <\/h3>\n

Security of smart contracts<\/a> has been a primary focus in research and development<\/strong> at least since the infamous hack of 2016 when Ether worth about $60 million at the time was drained from The DAO by a hacker who took advantage of a vulnerability in the code. <\/p>\n

Smart contracts take advantage of distributed ledger technology<\/a> on blockchains. They are, by nature, open-source and publicly readable<\/strong>. The question smart contract developers and researchers face is: How do we increase security for smart contracts without increasing costs? <\/p>\n

By using a peer-to-peer network, contracts are open to threats like event-ordering bugs and reentrancy bugs<\/strong>, where hackers can inject malicious data for their desired outcome. Usually, to gain a profit. <\/p>\n

Different possibilities for controlling security exist, and new software technology innovations continue to develop. Among the recent technical advances<\/strong>:<\/p>\n