I am trying to figure out what the announcement of the Wolfram Language means for Mathematica.
Is Mathematica an implementation of the Wolfram Language, or is it something else?
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The Wolfram Language is what we all know as Mathematica, but rebranded to help wider adoption to people, particularly for people who don't self-identify as "math" people. As a Mathematica programmer, emphasis on the "programmer", I see this as a good thing.
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I think that giving the language we use in Mathematica a name ("W", or whatever), and establishing it as separate from the Mathematica Interface is a step in the right direction. Mathematica is "Visual Wolfram" (arg) or something like that - an interactive interface for TWL. It has a REPL, renders graphics, formats tables, grids, etc.. That's not TWL - that's an environment it runs in.
The front end displays plots and graphics from the kernel, but something else could do the same thing. If you look inside the expression returned from evaluating Plot[...], the stuff you see isn't "The Wolfram Language" - it's data from the kernel, to be displayed. Splitting out TWL paves the way for other platforms (like in Rasberry Pi), and perhaps someday something like a compiler.