What are the benefits and challenges of using smart contracts for blockchain security?


It’s been some time since we have been using smart contracts as the base of our projects, all thanks to Ethereum for making it all possible, but have you ever wondered how smart contracts help or pose threats to the blockchain? In this blog, we will learn about blockchain's benefits and challenges due to smart contracts. Let’s first start with a simple question what are smart contracts?

What are smart contracts?

Smart contracts are how we explain complex functionalities to the blockchain. It is the gateway to the interaction of humans and the blockchain. Smart contracts are just a piece of code, but this gives them the ability and flexibility to be immensely useful.

The smart contracts are stored and executed on blockchain and can be triggered through events, data or other smart contracts. Smart contracts enforce trust, automate complex processes and improve efficiency. Every Web3 application has its backing in the form of smart contracts because these link the apps and the blockchain.

What are the security benefits Smart Contract provides with?

Bitcoin already saw a major breakthrough in the market, but what was more revolutionising was Ethereum and the introduction of smart contracts. Apart from just keeping the transactional records or ledger, one could code on the blockchain. That’s crazy. Along with flexibility and other abilities, smart contracts also helped to improve blockchain security in various ways. Let's discuss a few.

  1. No third-party:- Enterprises of our world have faced third-party issues since the business concept emerged. In some form or another, there is almost always a third party in play. And many times, these third parties can be fraud or vulnerable to fraud, which sabotages whole business models. With the help of Smart, the issue of third parties is eliminated by roots as there is little to no root for middlemen.
  1. Immutability and verifiability:- The core of the blockchain is transparency and decentralisation. When we introduce smart contracts, we empower that vision. With the help of smart contracts, we can improve immutability, verifiability and trackability, which inevitably leads to a better experience. Smart contracts help us by making sure the core values of blockchain are respected.
  1. Advanced systems:- When it comes to smart contracts, the users get the superpower of putting their creative ideas into the world. More advanced systems can be formed using smart contracts, which have huge significance. One such example of security enhancement through smart contracts is multi-signature verification which is used by many bridge protocols.

Blockchain Security challenges due to Smart Contracts

Sometimes power becomes the curse. This usually happens when the powers are misjudged and not used properly. The same is the case with smart contracts. The power that grants them usability is also the power that is the reason for the curse sometimes. Immutability.

Immutability can be expensive in some cases; thus, it is of utmost importance that the smart contract is written securely and efficiently, with no error or vulnerability, as these can have serious consequences. These errors or mistakes can lead to loss of funds, security breaches or data manipulation. To ensure the safety of the users and ourselves, we must consider the correctness and security of smart contracts.

Another issue at hand is the legal and regulatory use of smart contracts. The power in the wrong hands can cause huge damage. This sits perfectly when we talk about smart contracts. They have so much potential to be used in illegal activities; thus, the protocols and enterprises must ensure the legal and regulatory terms are met while building anything in Web3.


Smart contracts provide us with immense power, but this power must be regularly checked because there is a very thin line between powerful and vulnerable in the case of smart contracts. A smart contract with a vulnerability is like an open vault in most scenarios.

To save yourself from such smart contract issues QuillAudits provide you with one of the best smart contract auditing services to help you keep yourself and your users safe and help Web3 become a safer place. Build in Web3 build with us, Do visit our website to get your project audited.

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