Ethereum is a platform which stores and executes computer codes
Ethereum is a platform which stores and executes computer codes, it is not a cryptocurrency. Running and storing smart contracts on ethereum requires storage and computer power. Users must pay for the network computational power and storage which is paid in ether. Ether is the cryptocurrency that fuels Ethereum blockchain, abbreviated as ETH. Like bitcoin, ether is a peer to peer cryptocurrency, but also it is a programmable currency which serves several other purposes.
Value transfer:
Like other cryptocurrencies such as Bitcoin or Litecoin, Ether is used for making payments. It can be exchanged to services, goods, tokens or fiat currencies. But this is not the primary application of Ether.
Fuel for ethereum blockchain:
In order to execute smart contracts or decentralized applications on ethereum platform, the user must pay for the storage and computational power of the network. The execution fee is paid in ether. Users buy gas for ether to run the code. Gas measures how much computational work it takes to process a certain computer code. The more complex the code, the more gas is required. The fee makes sure that the users create quality applications and not spam the ethereum blockchain with wasteful code.
