Many people believe that ethereum is a cryptocurrency. No, it isn't. Ethereum is the name of a platform that uses the powerful technology of the blockchain and have added to it other powerful concept called 'smart contract'. In order to execute code in the ethereum platform it is needed to consume a token called ETHER. This token is the one that is exchanged in the market.
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Ethereum co-author was Vitalik Buterin, a programmer from Toronto, when he was 19 years old. He released the white paper in 2013. He initially thought Ethereum would be used for fairly limited purposes: "if X happened, then send $5 to account Y, if Z happens, send $5 to account B. That’s what I thought Ethereum would be used for.
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It is possibile to put on the ethereum blockchain some smart programs called 'smart contracts', in addition of only transactions of ethers. Basically these smart contracts are software that is deployed on the ethereum network and execute some logic that was coded by developers according to business need. They can do just about anything. Smart contracts are really powerful and can be used to enforce some contracts between parties or to perform some 'if-this-then-do-that' logic.
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At the heart of Ethereum there is the Ethereum Virtual Machine (“EVM”), which can execute code of arbitrary algorithmic complexity that was 'translated' in a byte-code. It was designed to serve as a runtime environment for running smart contracts. It handles internal state and computation of the smart contracts. In the ethereum network every Ethereum node runs their own EVM implementation.
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Within the Ethereum network is possible to build a new kind of web applications called DAPPS, or decentralized apps. Basically a Dapp is an application that uses the blockchain to store information instead of a central server owned by someone. There are a lot of interesting dapps built on the ethereum network and blockchain. Some examples of dapps that have achieved millions of dollars in market cap include Golem, Augur and Melonport.
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