diff --git a/hatch_vcs_footgun_example/__init__.py b/hatch_vcs_footgun_example/__init__.py
index 0ce84a2..eb030f0 100644
--- a/hatch_vcs_footgun_example/__init__.py
+++ b/hatch_vcs_footgun_example/__init__.py
@@ -1,20 +1,9 @@
-# Define the variable '__version__':
-try:
-    # If setuptools_scm is installed (e.g. in a development environment with
-    # an editable install), then use it to determine the version dynamically.
-    from setuptools_scm import get_version
+"""Project initialization.
 
-    # This will fail with LookupError if the package is not installed in
-    # editable mode or if Git is not installed.
-    __version__ = get_version(root="..", relative_to=__file__)
-except (ImportError, LookupError):
-    # As a fallback, use the version that is hard-coded in the file.
-    try:
-        from hatch_vcs_footgun_example._version import __version__  # noqa: F401
-    except ModuleNotFoundError:
-        # The user is probably trying to run this without having installed
-        # the package, so complain.
-        raise RuntimeError(
-            "Hatch VCS Footgun Example is not correctly installed. "
-            "Please install it with pip."
-        )
+It is a popular convention to define `__version__` in the top-level `__init__.py`.
+"""
+
+from hatch_vcs_footgun_example.version import __version__
+
+
+__all__ = ["__version__"]
diff --git a/hatch_vcs_footgun_example/main.py b/hatch_vcs_footgun_example/main.py
old mode 100644
new mode 100755
index 4fde653..f2d0842
--- a/hatch_vcs_footgun_example/main.py
+++ b/hatch_vcs_footgun_example/main.py
@@ -1,6 +1,6 @@
 #!/usr/bin/env python3
 
-from hatch_vcs_footgun_example import __version__
+from hatch_vcs_footgun_example.version import __version__
 
 if __name__ == "__main__":
     print(f"My version is '{__version__}'.")
diff --git a/hatch_vcs_footgun_example/version.py b/hatch_vcs_footgun_example/version.py
new file mode 100644
index 0000000..a92717f
--- /dev/null
+++ b/hatch_vcs_footgun_example/version.py
@@ -0,0 +1,45 @@
+"""Compute the version number and store it in the `__version__` variable."""
+
+
+def _get_hatch_version():
+    """Compute the most up-to-date version number in a development environment.
+
+    Returns `None` if Hatchling is not installed, e.g. in a production environment.
+
+    For more details, see <https://github.com/maresb/hatch-vcs-footgun-example/>.
+    """
+    import os
+
+    try:
+        from hatchling.metadata.core import ProjectMetadata
+        from hatchling.plugin.manager import PluginManager
+        from hatchling.utils.fs import locate_file
+    except ImportError:
+        # Hatchling is not installed, so probably we are not in
+        # a development environment.
+        return None
+
+    pyproject_toml = locate_file(__file__, "pyproject.toml")
+    if pyproject_toml is None:
+        raise RuntimeError("pyproject.toml not found although hatchling is installed")
+    root = os.path.dirname(pyproject_toml)
+    metadata = ProjectMetadata(root=root, plugin_manager=PluginManager())
+    # Version can be either statically set in pyproject.toml or computed dynamically:
+    return metadata.core.version or metadata.hatch.version.cached
+
+
+def _get_importlib_metadata_version():
+    """Compute the version number using importlib.metadata.
+
+    This is the official Pythonic way to get the version number of an installed
+    package. However, it is only updated when a package is installed. Thus, if a
+    package is installed in editable mode, and a different version is checked out,
+    then the version number will not be updated.
+    """
+    from importlib.metadata import version
+
+    __version__ = version(__package__)
+    return __version__
+
+
+__version__ = _get_hatch_version() or _get_importlib_metadata_version()