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Harsh Bansal
Harsh Bansal

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Understanding Smart Contract working in etherium

Solidity is a programming language designed for writing smart contracts on the Ethereum blockchain. Smart contracts are self-executing programs that contain a predefined set of rules, conditions, and functions. Once deployed to the blockchain, they run automatically when specific conditions are met—without the need for intermediaries.

Smart contracts run on the Ethereum Virtual Machine (EVM), a decentralized runtime environment that ensures the same code executes identically on every Ethereum node. These contracts handle transactions, store data, and interact with other contracts based on their programmed logic.

How Are Smart Contracts Triggered?

Smart contracts do not run automatically on their own. They execute only when triggered by a transaction.

A smart contract is triggered when:

  • A user sends a transaction
  • Another smart contract calls it
  • An external application (dApp backend, script, or bot) interacts with it In all cases, execution starts with a transaction sent to the contract address.

Example: Triggering a Smart Contract Using MetaMask
Let’s say a user wants to perform a transaction using the MetaMask wallet.

The user initiates a transaction in MetaMask
Instead of sending ETH to a regular wallet address, the user enters a smart contract address

Behind the scenes, MetaMask prepares the transaction with the following details:

  • Contract address – Which smart contract to call
  • Function selector – Which function to execute
  • Parameters – Input values required by the function
  • Gas limit & gas price – How much the user is willing to pay for execution
  • Value (optional) – Amount of ETH (or native coin) to send

Transaction Creation and Signing
Once the transaction details are set:
MetaMask creates a transaction object
The transaction is signed using the user’s private key
This cryptographic signature proves that the user authorized the action
⚠️ The private key never leaves the wallet
Broadcasting the Transaction to the Network

After signing:
The wallet sends the transaction to the Ethereum network
Nodes receive it and propagate it across the network
The transaction enters the mempool (a pool of pending transactions)

Block Validation and Execution
Depending on the consensus mechanism:
Miners (Proof of Work – older Ethereum)
Validators (Proof of Stake – current Ethereum)

They:
Select pending transactions
Execute them locally to verify validity
Bundle them into a block
Add the block to the blockchain

What Happens Inside the EVM?
When a node processes your transaction, the Ethereum Virtual Machine performs the following steps:
Decode the transaction data
Extracts the function signature and parameters

Locate the contract code
Uses the contract address to fetch bytecode from the blockchain
Match the function
Identifies the correct function using the function selector

Execute the function logic
Runs the Solidity code instruction by instruction

Check conditions
For example:
Does the user have enough balance?
Is the caller authorized?
Update blockchain state
Transfer tokens
Modify stored values
Emit events

If any check fails (e.g., insufficient balance or failed require condition), the transaction reverts, and state changes are discarded (though gas is still spent).

Token Standards and Protocols
Smart contracts often follow predefined standards, depending on the blockchain and ecosystem:
ERC-20 – Ethereum token standard
BEP-20 – Binance Smart Chain token standard
TRC-20 – TRON token standard

These standards define how functions like transfer, approve, and balanceOf behave, ensuring compatibility across wallets and dApps.

Summary
In short:
Smart contracts execute only when triggered by a transaction
Wallets like MetaMask prepare and sign transactions
Validators execute contract code inside the EVM
Execution follows strict rules and consumes gas
The result is permanently recorded on the blockchain

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