Ethereum is a decentralized software platform that’s built specifically for creating smart contracts and distributed applications. The applications on Ethereum are run on a platform-specific cryptographic token called ether (ETH). It can be used to “codify, decentralize, secure and trade just about anything.”
Put simply, smart contracts are programs that execute as they are set up to by their creators. The idea was originally described by computer scientist and cryptographer Nick Szabo as a kind of digital vending machine: users could input data or value and receive a finite item from a machine (in this case a real-world snack or a soft drink).
Instead of proof-of-work Ethereum is going to use proof-of-stake model making ether significantly less energy-costing.