Ethereum is a software platform which is built on blockchain technology. This is a technology which registers transactions. This could be value transactions but it could also be messages or documents. Every exectuted transaction is publicly registered through blockchain. There is no middleman needed for this, instead the blockchain is used as a control function. This takes away a large amount of tasks that banks and financial institutions have. Banks have a large database on which financial data of customers is stored. Ethereum’s blockchain is a database without an owner on which just like banks transactions and ownerships can be sent/stored.
Other than a blockchain the Ethereum network also has its own programming language called Solidity. This is a language which can be used to code decentralized applications and smart contracts. These can be used to build a peer-to-peer-economy or a decentralized financial system.
The ether coin is the currency applied to Ethereum. Ether is mainly used for ‘contracts’. Application developers use ether to pay for transaction costs and services on the Ethereum network. Ethers are the fuel that enables Ethereum to work. People use their computer to keep the Ethereum network running and in return they get ethers for this service. So in contrary to bitcoin ether can also be used as a fuel other than just a currency.
DApps are applications with self-executing smart contracts. These contracts enable them to be decentralized. A dApp is fully open-source and is controled by multiple entities. The data of the application is publicly stored on a decentralized blockchain. A dApp uses app coins, this is a crypto-graphic token which is needed to gain access to an application. Both miners and farmers are also rewarded with these tokens. A dApp generates tokens with a crypto-graphic algorithm, this algorithm applies as proof for the nodes that contribute to the application. Through the dApp-model it is possible for users to contribute to the Ethereum Network. This can be done by buying coins.
Many startups in the Ethereum network have been launched through initial coin offerings. Especially Fintech startups use initial coin offerings for developing, financing and launcing dApps. So startups give away tokens to investors that are willing to financially support them with ethers. So other than investing in ethers as a crypto currency they can also be used for funding Fintech startups to get coins in return which can be seen as shares in the dApp startup which runs on the Ethereum network.