Ethereum is a software network founded in 2014 with the native digital token Ether as the unit of account for record keeping. Like bitcoin, Ethereum is an open-source project that is not owned or operated by a single individual. Anyone, anywhere with an internet connection, can download the software and begin interacting with the Ethereum network.
Unlike the Bitcoin network, the primary purpose of Ethereum is not to act as a form of currency, but to allow those interacting with the Network to make and operate Applications without having to trust each other or use a middleman. Smart contracts are the type of software programs that drive applications on ethereum and run exactly as programmed without any possibility of downtime, censorship, fraud, or third party interference. A smart contract will work the same every time it is used.
Ethereum uses a 'virtual machine' to achieve all this, which is like a giant, global computer made up of many individual computers running the Ethereum software. People interact with the Etherum network by using Ether to pay the network to execute smart contracts.
Ethereum aims to take the decentralisation, security, and openness afforded by blockchains and extend those to virtually anything that can be computed.