In hackish, the word luser takes on a broad meaning, referring to any normal user (in other words "not a guru"), with the implication the person is also a loser. The term is interchangeable with the hackish term lamer.
It can also signify a layman with only user account privileges, as opposed to a power user or administrator, who have knowledge of, and access to, superuser accounts. For example, The Sysadmin doesn't trust the end luser with a root account password. This term is very popular with technical support staff who have to deal with lusers as part of their job, often metaphorically employing a LART (Luser Attitude Readjustment Tool, or "clue-by-four".)
The Jargon File states that the word was coined around 1975 at MIT. Under ITS, when a user first walked up to a terminal at MIT and typed control-Z to get the computer's attention, it printed out some status information, including how many people were already using the computer. A patch to the system was then written to print "14 losers" instead of "14 users", as a joke. For a while, several hackers who disagreed on the appropriateness of the change struggled covertly, each changing the message behind the backs of the others; any time a user logged into the computer it was even money whether it would say "users" or "losers". Finally, someone tried the compromise "lusers", and it stuck. Later, ITS also had the command "luser", which attempted to summon assistance from a list of designated helpers.
Although ITS ceased to be used in the mid-1990s, use of the term continued to spread, partly because in Unix-style computer operating systems, "user" designates all unprivileged accounts, while the superuser, or root, is the special user account used for system administration. root is the conventional name of the user who has all rights or permissions (to all files and programs) in all modes (single- or multi-user); the usage lives on, however, and the term "luser" is often seen in program comments.
On Windows operating systems, lusrmgr.msc is the MMC snap-in used to manage local users.
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Notes and references
This article is based in part on the Jargon File, which is in the public domain.