What if SMAUG had gotten The One Ring?

[Valandil]

OK - I know JRRT wasn't even thinking about LotR when he wrote 'The Hobbit'... but treating this as 'discovered history' rather than 'fiction' - imagine this scenario:

Bilbo's second visit to Smaug's lair... Bilbo is a bit slower getting out, or Smaug decides to take a blast in his general direction a bit sooner... with less provocation. He sees a form engulfed in the flame of his breath... or just his flames flickering in and out of visibility... until Bilbo is consumed and 'CLING'... with a ringing sound, a gold ring falls to the floor.

Smaug picks it up... curiously. "What's this thing that didn't burn up in my firey breath?" He examines it, notices how it grows to fit his finger, tries it on... and discovers its nature.

What happens next?

(OR - if his breath DID melt it - I guess there'd be no 'Lord of the Rings' story. Sauron would have withered away, with all his plans and his ringwraiths... Gandalf could have returned to the West and the work of the Elven Rings would have begun to fade. Then Smaug could have had the 13 dwarves for lunch (invisible... heehee! ))