When Smaug was only a little dragonling, he couldn't fly. By this time, all the other dragonlings were killing and hunting and breathing fire, and they made his life miserable.
"Wyrm, wyrm" they taunted Smaug.
Wyrm meant serpent; that you couldn't fly, you couldn't breathe fire, you were no more than a common snake, earth-bound.
"I'm not a wyrm. I'm a dragonling, and one day I'm going to be a dragon. "
"Prove it. Fly away," one of them would say, and would let out a puff of flame. They'd all fly away and Smaug would be left on the ground. Fire could not kill a dragon, but that did not mean it didn't hurt; his scales weren't even grown properly yet.
Because of the limited supply of gold, there was not enough to sustain too many dragons in any one land, so when all the dragonlings came of age, they fought until there was only one left. It meant only the strongest survived, and kept numbers down.
Everyone always said that Smaug was going to be the first to die; that he was a weakling and would only serve as an appetiser to the slaughter, nothing more.
"I won't," Smaug said, but no one listened.
The day of the battle eventually came. The others raged fire and blood in the sky, but Smaug still couldn't fly very well and so crawled away on the ground and hid behind a rock. He was still so little that it worked pretty well as a cover.
It was only when there was only one other dragon left, Gargan, that Smaug came back out.
"I don't want to hurt you," he said.
"Hurt me? As if you could hurt me!" Gargan said. He was black and grey like smoke, and had terrible red eyes, and was very confident.
He swooped in and landed beside Smaug. "I'm warning you," Smaug said, but Gargan kept advancing. Smaug closed his eyes and built up the flame inside of him. He had never ever let it out before and it burned hot inside of him, and it built up and up as Gargan approached, and then Smaug could not hold it anymore and flame poured from his jaw, and the ground around them burned and Gargan burned too, such was the heat, and it was very easy then to bite off his head, as dragons do in battle.
"I win. I told you I wasn't useless," Smaug said to no one in particular. He was happy, but the older dragons didn't like the result; they said he cheated by pretending he couldn't breathe flame- although he'd never actually said that- and they banished him forever.
"I deserve to be the winner," Smaug told himself as he flew away, very badly. He had to make many stops. He still wasn't very strong.
"I am a dragon, and I am powerful," he said, but he didn't feel that way.
At last he reached a nice mountain, and he breathed some more flame so those mean dwarves would leave him alone, and inside the mountain, he curled up in the gold, as if that made up for being utterly alone, as if that was his armour that would protect him from all the nasty things that were said.
Smaug went to sleep, and thought that he might prove them wrong. Next year he'd show them all that he was powerful, that he was magnificent.
But for now, he slept.