Smart contracts, the cornerstone of today's Decentralized Finance (DeFi) and Web3, predate the advent of blockchain technology. The concept was first introduced in 1994 by cryptographer Nick Szabo. Szabo defined these digital contracts as "self-executing" or "self-enforcing," where the terms of an agreement are directly written into code and enforced by cryptographic methods. He used the analogy of a vending machine – a physical smart contract that automates the exchange of products for payment. His vision was a future where the need for intermediaries would be reduced, and transactions would become more transparent and efficient.
While Szabo's idea was revolutionary, the technology required to fully realize it didn't exist. The advent of blockchain technology paved the way for smart contracts to come to life in the real world.
Initially, Satoshi Nakamoto's introduction of Bitcoin in 2008 brought forth a decentralized digital currency and the underlying blockchain technology. Bitcoin's scripting language allowed for simple smart contracts, such as multi-signature transactions, where the consent of multiple parties is necessary to complete a transaction. This can be considered a basic form of a smart contract.
However, the full potential of smart contracts truly emerged with the launch of Ethereum by Vitalik Buterin in 2015. Ethereum introduced a Turing-complete programming language, Solidity. This meant that developers could now build smart contracts with any complex logic and conditions, not just simple transactions. Ethereum provided a platform for Decentralized Applications (dApps) and Decentralized Finance (DeFi), initiating the widespread use of smart contracts.
Today, there are many major players in the blockchain industry, and "who is leading" often depends on the use case and specific sector.