Ethereum is an open source blockchain based distributed computing platform. The primary benefit of the Ethereum blockchain is in it's flexibility. You can use Ethereum as a cryptocurrency or as a decentralised pmputing platform. It features ‘turing-complete' properties that which enable the Ethereum Virtual Machine (EVM).
Ether is the unit of account on the Ethereum network. You can use it to pay for things and transfer value. It also used to fund interactions with smart contracts on the network. This is to prevent bad and malicious code from using too much resources on the network. Every action on the Ethereum network requires a gas payment and you make this payment with Ether.
Ethereum was designed by Vitalk Buterin, a bitcoin programmer, in 2013. It was later released in 2014 by Ethereum Switzerland GmbH. Initial funding came from a public crowdsale where 11.9 million Ether was sold for Bitcoin. This is approximately 13% of the circulating supply. The remaining Ether has been generated by mining.
What are Smart Contracts?
Smart Contracts are are snippets of code that compile and run logic on the blockchain. You can use smart contracts to control funds or create decentralised applications (DApps). This functionality has led to many people stating that Ethereum is Blockchain 2.0 or Web 3.0 technology. Unfortunately flexibility can also lead to complexity within smart contracts. So the Ethereum blockchain is generally considered to be secure. But some smart contracts may not be. Significant bugs discovered in some smart contracts has led to big hacks and loss of funds.
What about DApps?
Decentralised Apps (or DApps) on Ethereum use functionlity on the blockchain to operate. This is in contrast to traditional software that may use logic & data on your machine. When the data is on your device you can manipulate it and make the app do things it shouldn't. This leads some companies to place their code on a centralised server. But this shifts the trust so now you must trust the software to do what it says. With DApps functioning through the blockchain, you can audit the code and be sure that you. One of the biggest examples of a functioning DApp right now is CryptoKitties. In it you can breed and collect kitten characters. There are also more serious experiments taking place in governance and financial management.