How did the conflict with bilbo and the dragon arise

Assuming that Smaug would not recognize the scent of a hobbit, Gandalf also recruits Bilbo Baggins to join the quest, which is the subject of The Hobbit. Upon reaching Erebor, the Dwarves sent Bilbo into Smaug's lair, and he was initially successful in stealing a beautiful golden cup as Smaug slept fitfully.