What are smart contracts, and why are they revolutionary?

The answer

Smart contracts are self-executing programs stored on a blockchain that automatically enforce the terms of an agreement when predefined conditions are met - no intermediary required. For example, a smart contract could automatically release payment to a supplier the moment a shipment's GPS confirms delivery. First proposed by Nick Szabo in 1994 and implemented on Ethereum in 2015, they enable decentralized applications (dApps) for lending, insurance, real estate, and more. However, because they're immutable once deployed, bugs in smart contract code have led to losses exceeding $1 billion.