Smaug is a dragon, and the main antagonist within The Hobbit.
One of the last great dragons of Middle-earth, Smaug rose to prominence by laying waste to the town of Dale and capturing the Lonely Mountain (Erebor) with all of its treasure. These events occurred some 150 years before the events of The Hobbit, and Smaug was already centuries old at the time. The book recounts the tale of a party of dwarves (consisting of a few of the original residents of the Lonely Mountain and their descendants) and the titular hobbit to recapture the mountain and kill the dragon. In the book, he is sometimes called Smaug the Golden or Smaug the Magnificent.
Smaug was intimately familiar with every last item within his hoard, and instantly noticed the theft of a relatively inconsequential cup by Bilbo Baggins. According to Tolkien, his rage was the kind which “is only seen when rich folk that have more than they can enjoy lose something they have long had but never before used or wanted.” This theft of a cup, Smaug’s knowledge of every item in the hoard, and the dragon’s ensuing rampage all echo the story of Beowulf, on which Tolkien was a noted expert and which he described as one of his “most valued sources” for The Hobbit. Among the items in Smaug’s possession were the Arkenstone, and a number of mithril mail shirts, one of which was given as a gift to Bilbo by Thorin Oakenshield, the company’s leader. In The Lord of the Rings, set years later, the shirt saved Bilbo’s relative Frodo from injury multiple times.
As with most dragons, Smaug’s scaly hide is nigh invulnerable, yet his soft underbelly is vulnerable to attack. However, centuries spent sleeping atop his gold hoard has caused gold and gems to become embedded in his flesh, creating essentially an impenetrable armour. However, when Bilbo met him in his lair, he discovered a small bare patch on Smaug’s left breast. When Bilbo told his Dwarf companions about Smaug’s weakness, he was overheard by the thrush that roosted by the mountain’s secret door. The thrush in turn told Bard the Bowman of Esgaroth. When Smaug attacked the town, Bard shot his Black Arrow into Smaug’s left breast, the armour’s weak spot, killing him.
After Smaug’s death, Thorin and Company claimed the treasure as theirs by birthright. This created a conflict with Bard and the Elven king Thranduil of Mirkwood, who each wanted a portion of the gold as reimbursement for all the damage Smaug had caused their kingdoms over the years. Thorin refused to share the treasure as long as they stood in arms before his gate, and declared war on both of them. Conflict was avoided by the arrival of the Goblin and Warg army who wanted the treasure out of greed, and the Dwarves decided to ally with the Elves and Men to fight this greater evil in what became known as the Battle of Five Armies, during which Thorin was mortally wounded.