Ethereum is a decentralized platform that runs smart contracts: applications (dapps, decentralized applications) that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
Ethereum was created with the philosophy of how the Internet was supposed to work.
Ethereum was crowdfunded during August 2014 by fans all around the world. It is developed by ETHDEV with contributions from great minds across the globe.
Yet it’s similarities with Bitcoin and other cryptocurrencies, Ethereum is not only a currency, it’s platform for smart contracts and decentralized applications.
As the Wikipedia page says:
Ethereum is a blockchain-based virtual machine and Web 3.0 platform featuring stateful user-created digital contracts and a Turing-complete contract programming language. Ethereum uses its underlying network unit, Ether, as payment to execute Ethereum contracts as a workaround to the halting problem.
Ethereum Release Stages
Frontier: The first stage will be usable through a computer’s command-line only. It will allow mining at 10 % the normal rate, and contracts will be uploadable and executable. This is basically the time that people can begin to experiment with uploading their own DApps (decentralized applications) onto the network. Periodic “checkpoints” will also be performed by the Ethereum team to check network accuracy, causing a 12 hour latency period each day.
Homestead: When Homestead is launched mining will be bumped up to 100 % the normal rate. Checkpoints may or may not be removed. Operation will still be in the command-line only.
Metropolis: The third stage is when the user interfaces come out (possibly the Mist Interface), including a Dapp store, and non-technical users should feel comfortable joining at this point.
Serenity: The fourth stage, where things are going to get fancy: the network is going to change its mining process from Proof-of-Work to Proof-of-Stake.