Ethereum dictionary – Technical terms and jargon made easy

ethereum header

Whenever you first get in touch with people talking about Ethereum, you will think they are probably talking about the latest Role Playing Game or some Playstation trendy game out there. Terms like Ether, DAO and phrases like “How  much Ether did you buy last night?”, “I’m mining Ether”, “I don’t see my account at the ether chain” will make you think:  “Man, these grown ups and their video games…”

You wouldn’t even think people is actually talking of something as real (or may be more real) as the US dollar and that would probably be the foundations of our future world.

So let’s take a look at some of the first terms you would need to get familiar with if you want to get into the Ethereum world:

Ethereum

A decentralized super computer, sort of a virtual machine.  The concept is of machine with no centralized server and 100% uptime.  Remember Napster? well, sort of a P2P system that lives nowhere.

Ether

ethereum logoA currency created to support the Ethereum super computer. People giving their computing power to the machine are to be rewarded with Ether.

Ether is limited and finite, so it gains value once “extracted” (obtained in exchange of computing power).

 

ETH

The unofficial currency code for Ether.  That’s right, this currency can be trade as any other currency and, guess what…  Investors love to trade it!  If you search for ETH you’ll probably hit a few technical charts showing the Ether price like this one.

eth-chart

Blockchain

A decentralized database created from thousands of thousands of computers sharing blocks of information in a way that makes the whole network extremely secured.  Ether is traded in a blockchain.

Etherchain

A common name for the database that allows Ether transactions. This database is so secure and transparent that all transactions are registered, confirmed and allowed by thousands of machines, making it almost imposible to change or modify the result of a transaction.

Bitcoin

The first digital currency, this one you probably heard of before.

Litecoin

A competitor currency, inspired on Bitcoin. Part of the crypto currencies family.

Miner

Someone who is willing to give away his computer power or capacity in exchange of Ether.  It works the following way: You decide you want to mine ether, so you run a software in your computer that will connect it to the Ethernet allowing blocks to be processed using your computational power.  Your reward: a few cents of Ether that can be traded in the market.

Add tens of thousands of these computers and you have the most powerful machine in the world, decentralized and impossible to control only by one entity.

DAO

The first decentralized enterprise funded with Ether and running on top of the Ethereum machine. Is basically a Venture capital company where the shareholders are normal people that invested Ether in the company from April 28th 2016 to May 28th 2016.

DAO

The DAO regulations are coded directly in the Ethereum machine and there are no managers. Shareholders are able to decide where to invest by voting and running smart contracts.

 

Hope this quick guide helps you navigate the world of Ethereum.