Ether and Gas
Ether is the cryptocurrency created by the Ethereum blockchain as a reward to the people providing the computer power for the computations performed, and is the only currency accepted in the payment of transaction fees on the Ethereum blockchain.
Transaction fees are calculated with small amounts of ether. These are measured in a unit called gas. A user sends gas with there transaction to the Ethereum blockchain. This means that the user wants to change the state of the Ethereum blockchain.
All other transactions also get pooled together and then all computers around the world that are running Ethereum software try to validate the transactions. Whichever computer validates the transactions first gets rewarded in ether.
Ether is the token running the Ethereum blockchain. Ether powers the Ethereum network. The computers that are distributed around the world running the Ethereum blockchain software, validating transactions, are called miners.
Ethereum is an open-source platform that can run smart contracts. When smart contracts are run on a blockchain, the code that makes the smart contract can execute on its own if certain conditions are met. The execution of smart contracts requires computational resources that must be paid for in some way: this is where ether comes in.
Ether is the cryptocurrency that allows smart contracts to run. It provides the incentive for nodes or miners to confirm and validate blocks on the platform, which has the smart contract code. Each time a block is validated, ethers are created and awarded to the successful miner. A new block is propagated approximately every twenty seconds.
There are two ways people can interact with the Ethereum blockchain. They can read information or they can update information. The Ethereum blockchain has a state that is shared amongst everyone running the Ethereum software. If anyone wants to make a change to the Ethereum blockchain state, they have to pay a fee in ether (ETH).
People interacting with decentralized applications on Ethereum will be required to pay the network in ether. Developers are incentivized to create decentralized applications because they will be paid in ether for their work. Developers are also incentivized to write quality applications because wasteful applications will be more expensive and likely will not be used as frequently.