First, its important to understand that there are two categories of digital coins: cryptocurrencies ( Bitcoin, Litecoin, Zcash, Monero etc) and Tokens ( Ethereum, Filecoin, Storj, blackstock etc)

Bitcoin is a "cryptocurrency", Bitcoin and other cryptocurrencies are competing against existing money (and gold) to replace them with a truly global cryptocurrency.

Ethereum is a "Token", what Bitcoin does money. Ethereum does for contracts. Ethereum's innovation is that is allows you to write smart contracts: basically any digital agreement where you can say "if this" happens, "then something else happen".