Ethereum (ETH), also known as Bitcoin 2.0, is a blockchain-based block-based distributed computing platform, through the use of the Smart Contract function. Ethereum virtual currency can execute transactions, peer-to-peer network transactions via the Ether currency.
Ether is a necessary element — a fuel — for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources).