A simple blockchain / Ethereum glossary
Updated 1st Sept 2022
Beacon chain = The Beacon chain has been created (1st december 2020) in order to prepare the switch from Proof of work, to Proof of stake. After The Merge, the Beacon Chain will be the consensus engine for all network data, including execution layer transactions and account balances. The Merge represents the official switch to using the Beacon Chain as the engine of block production. Mining will no longer be the means of producing valid blocks. Instead, the proof-of-stake validators assume this role and will be responsible for processing the validity of all transactions and proposing blocks. No history is lost. As Mainnet gets merged with the Beacon Chain, it will also merge the entire transactional history of Ethereum.
Block = “Block” refers to data and state being stored in consecutive groups known as “blocks”.
Blockchain = A blockchain is a public database that is updated and shared across many computers in a network.
Chain = “Chain” refers to the fact that each block cryptographically references its parent. In other words, blocks get chained together. The data in a block cannot change without changing all subsequent blocks, which would require the consensus of the entire network.
Consensus = This is the logical mechanism to obtain, prior to adding a new block to the chain.
DAPP = Decentralized applications hosted on a blockchain.
EMV Ethereum Virtual Machine = The EVM’s physical instantiation can’t be described in the same way that one might point to a cloud or an ocean wave, but it does exist as one single entity maintained by thousands of connected computers running an Ethereum client. Ethereum
Ethereum = Ethereum is a technology for building apps and organizations, holding assets, transacting and communicating without being controlled by a central authority.
Etherum Layer 1 = Layer 1 is the base blockchain. It is the underlying foundation that various layer 2 networks build on top of. It includes : a network of node operators to secure and validate the network, a network of block producers, the blockchain itself and the history of transaction data, the consensus mechanism for the network.
Ethereum Layer 2 = On top of layer 1, Layer 2 will add more capacity to the Ethereum network, mostly on scalability. Ethereum
Ethereum mainnet = The primary public Ethereum blockchain network. Besides the mainnet, other Ethereum networks are test networks, private networks deployed by an industry group or consortium and parallel networks that augment Ethereum.
Gas = Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network. Gas fees are paid in Ethereum’s native currency, ether (ETH). Gas prices are denoted in gwei, which itself is a denomination of ETH — each gwei is equal to 0.000000001 ETH (10–9 ETH). Etherum
Mining = Mining is the process of creating a block of transactions to be added to the blockchain, by executing the proof of work. Mining is a way to secure the network by validating the operations.
Node = Every computer in the network must agree upon each new block and the chain as a whole. These computers are known as “nodes”. Nodes ensure everyone interacting with the blockchain has the same data. To accomplish this distributed agreement, blockchains need a consensus mechanism.
Proof of stake = New consensus protocol to be used on Ethereum after The merge. In proof-of-stake, validators explicitly stake capital in the form of ether into a smart contract on Ethereum.
Proof of work = Consensus protocol used by Bitcoin and Ethereum. In proof-of-work, miners prove they have capital at risk by expending energy. Wikipedia
Sharding = Sharding is the process of splitting a database horizontally to spread the load.
Smart contract = A “smart contract” is simply a program that runs on the Ethereum blockchain. It’s a collection of code (its functions) and data (its state) that resides at a specific address on the blockchain.
The merge = Soon, the current Ethereum Mainnet will merge with the Beacon Chain proof-of-stake system. This will mark the end of proof-of-work for Ethereum and the full transition to proof-of-stake. This sets the stage for future scaling upgrades including sharding. The Merge will reduce Ethereum’s energy consumption by ~99.95%.
Web3 = Read — Write — Own. Web 3 is decentralized.
