smart contract

How to Write Smart Contracts on Bitcoin

Nick Szabo developed the term “smart contract” in 1996, long before Satoshi Nakamoto had even thought of a blockchain. They have nothing to do with decentralized autonomous organizations [DAOs], decentralized exchanges, or any other concepts that come to mind when people hear the term.

The notion was far more basic and straightforward than any of the systems created on top of Ethereum. Smart contracts were essentially strategies to move the enforcement of traditional legal contracts outside of governmental boundaries and into the realm of software and hardware enforcement as possible.


Bitcoin is a smart contracting platform in the truest sense of the word. The bitcoin network operates as a massively distributed mediator, ensuring that smart contracts be executed appropriately without depending on a single central authority. Moreover, it makes contracts visible, verifiable, and enforceable. 

The one aspect of a contract on which it has historically fallen short is privity- all of the conditions of Bitcoin smart contracts are open to the public. It does, however, protect the real identities of persons who enter into contracts, and Taproot’s recent activation is a huge step forward in hiding contract clauses until they are needed to enforce them. 

When a Bitcoin transaction takes place, the sender acts as an oracle, claiming to spend money and proving it with a digital signature. The receiver and every other network participant monitor the transaction’s progress and validate that the digital signature is correct. 

Then, whichever miner succeeds in finding the next block steps in and “executes” the smart contract by inserting the transaction in a block and propagating it over the network by whichever miner successfully finds the next block. Finally, the receiver and the entire network validate that each signature and contract witness in the block is correct.


Smart contracts are software programs, as we’ve already established. However, the language is an essential aspect of any smart contract developer, as it teaches you how to construct smart contracts

You may develop smart contracts in Bitcoin using Solidity, a statically typed language currently the most used smart contract programming language. Solidity is a full-featured smart contract programming that looks similar to Javascript.


Installing the Remix IDE is the initial step. It is a browser-based Smart contract development environment with plugins and compilers for various Solidity versions. Then enable the Solidity compiler plugins and click on the “Solidity compiler” button.


Next, create a project file for the language. For example, make a file called “mysmartcontract.sol” in this folder. Solidity is represented by the “sol” file extension, same as python is represented by the “py” file extension. Then, proceed to write your code. After doing this, the compiler displays a green icon, which signifies that the compilation is successful.

You can also write Bitcoin smart contracts in other languages such as:

  • Vyper
  • Rust
  • Smart contract essentials
  • Chainlink
  • Openzeppelin
  • DappTools
  • Truffle
  • Hardhat

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