Common terms on the Ethereum blockchain

For your convenience, we will briefly define some of the words you will most frequently encounter when interacting with the Ethereum blockchain in this quick guide. If there are any that are absent, please let me know and I will include them. References will be provided if you want more information.

1. Blockchain— A distributed, decentralized digital ledger technology that is used to record transactions in a secure, transparent, and tamper-proof way.
2. Ethereum— A blockchain-based decentralized platform that enables the creation of smart contracts and decentralized applications (dApps).
3. Smart contracts — Self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
4. Decentralized Applications (dApps)— Applications that run on a decentralized network, rather than a central server, making them more secure and resistant to censorship.
5. Ether (ETH)— The native cryptocurrency of the Ethereum blockchain, used to pay for transactions and computation on the network.
6. Gas — A unit of measurement for the computational effort required to execute a transaction or run a smart contract on the Ethereum network.
7. Gas limit — The maximum amount of gas that a user is willing to pay for a transaction on the Ethereum network.
8. Gas price — The price of gas in Ether that a user is willing to pay for each unit of gas used in a transaction.
9. Gwei — A unit of Ether used to measure gas prices on the Ethereum network. 1 Gwei is equivalent to 0.000000001 ETH.
10. Solidity — A programming language used to write smart contracts on the Ethereum blockchain.
11. Mining— The process of validating transactions and adding them to the blockchain in exchange for a reward, usually in the form of cryptocurrency. In the context of Ethereum, it is the process of creating a block of transactions to be added to the Ethereum blockchain in Ethereum’s now-deprecated proof-of-work architecture.
12. Consensus — The process by which network participants agree on the state of the blockchain and validate transactions.
13. Proof-of-stake (PoS)— A consensus algorithm used by the Ethereum network to validate transactions and create new blocks.
14. Mempool — alias memory pool — refers to the set of unconfirmed transactions stored in a node’s memory before they are confirmed and/or added to the blockchain.
15. Decode—a smart contract—the process of taking raw data stored in a transaction or contract and interpreting it into a human-readable format, allowing users to view and understand the data and methods in a particular transaction.
16. Auditing — of a smart contract, involves checking it to ensure security and functionality—a detailed evaluation of a smart contract’s source code to uncover possible failure-points, security flaws, and poor development practices. While code audits can be automated, we refer to human-aided code analysis here.
17. ABI — alias smart contract Application Binary Interface — refer to a set of rules that dictate how two software programs or contracts can interact with each other on the Ethereum blockchain. In the context of the Ethereum blockchain, it typically defines how data is encoded in smart contract functions and how it is decoded in the response.
18. Transactions — the fundamental building blocks of any cryptocurrency or blockchain-based network. A transaction is simply the exchange of value between two parties, recorded on the blockchain ledger. The simplest transaction is transferring ETH from one account to another.
19. Block — a collection of transactions that have been validated and added to the blockchain ledger. Each block contains a header, which includes metadata about the block, as well as a list of validated transactions.
20. ERC-20 — A standard protocol for creating and managing fungible tokens on the Ethereum blockchain.
21. ERC-721 — A standard protocol for creating and managing non-fungible tokens (NFTs) on the Ethereum blockchain.
22. Web3.js — It is a collection of javascript libraries that allow you to interact with a local or remote Ethereum node using HTTP, IPC or WebSocket.
23. Infura — A remote Ethereum node provider that allows developers to access the Ethereum network without running a node locally.
24. Remix — An online IDE (integrated development environment) for writing and deploying smart contracts on the Ethereum network.
25. Fork— A change to the blockchain protocol that results in the creation of two separate chains, typically due to a disagreement among network participants.
26. Hard fork — A change to the Ethereum protocol that is not backwards-compatible with previous versions of the software. This means that all nodes in the network must upgrade to the new version in order to continue participating in the network. If a node does not upgrade, it will not be able to validate transactions or create new blocks on the new chain.
27. Soft fork — A change to the Ethereum protocol that is backwards-compatible with previous versions of the software. They are typically used to introduce small changes or improvements to the blockchain protocol without disrupting the existing network. They are usually implemented by adding new rules to the consensus algorithm, which means that blocks created under the new rules are still valid under the old rules.

Soft and Hard Fork (image from blockala)

Conclusion

Although this list is not all-inclusive, I believe it will serve as a useful starting point for your exploration of how to interact with the Ethereum blockchain. Please let me know if you think I should include any terms that you don’t see. I appreciate your time and will see you in a future article.