As we explored in “What is Ethereum?”, Ethereum aims to function both as a kind of decentralized Internet and a decentralized app store, supporting a new type of application (a “dapp”) in the process.
But while no one owns Ethereum, the system that supports this functionality isn’t free. Rather, the network needs “Ether”, a unique piece of code that can be used to pay for the computational resources needed to run an application or program.
Like Bitcoin, Ether is a digital bearer asset (similar to a security, like a stock or a bond, issued in physical form). Just like cash, Ether doesn’t require a third party to process or approve a transaction.
But instead of operating as a digital currency or payment, Ether seeks to provide “fuel” for the decentralized apps on the network.
Above: What is Ether?