Do's and Donts of a Smart Contract

Smart contracts, especially in blockchain environments like Ethereum and Cosmos, operate under specific constraints due to the deterministic and secure nature of blockchain technology.

What You Can Do in a Smart Contract#

State Management: Smart contracts can read from and write to their internal state stored on the blockchain. This includes modifying values of variables or data structures defined in the contract.
Mathematical Computations: You can perform calculations and logical operations. However, the complexity is limited by gas costs and computational efficiency.
Interact with Other Contracts: Smart contracts can call functions of other smart contracts.
Emit Events: Contracts can emit events to log information that external applications can listen to and react upon. These events are not accessible from within blockchain but are useful for off-chain applications.
Handle Cryptographic Operations: Basic cryptographic functions, like hashing and signature verification, are supported, which are crucial for security and identity verification.
Conditional Logic: Execution of code based on conditions and inputs, allowing for dynamic behavior governed by predefined rules.
Payments and Transfers: Send and receive cryptocurrency or tokens managed by the blockchain.

What You Cannot Do in a Smart Contract:#

Random Number Generation: Generating true randomness inside a blockchain is problematic due to the deterministic nature of blockchains. Any method used within the blockchain can potentially be predicted or influenced by miners or validators.
Access External Data: Smart contracts cannot directly access or query external systems or the internet. This limitation is why oracles are used in blockchain ecosystems to provide external data securely.
Persistent Connections: They cannot open or maintain a persistent connection with other services or systems. Each transaction or function call is stateless and must complete within a single transaction block.
File Storage: Smart contracts cannot access or store files directly. They operate with data strictly within the blockchain state, which is typically limited to transaction data and contract states.
Unbounded Loops: Due to gas limits in blockchains like Ethereum, operations that could run indefinitely are generally avoided because they can lead to out-of-gas errors and disrupt the contract execution.
Direct System Changes: They can’t make changes to the blockchain protocol or node operation, nor can they affect the governance of the blockchain directly, outside of the rules defined by the blockchain itself.