Gems are the virtual currency replacing the existing Lingots in Duolingo. You will continue to earn Gems as you would have earned Lingots for completing lessons on Duolingo. Over time we will introduce additional and optional ways to earn and spend Gems, but to be clear, Gems are auxiliary: they are not required to learn on Duolingo. Gems are coming to iOS only first.
Do I need Gems to use Duolingo?
No. All learning content continues to be available to everyone, for free. While Gems can be used to motivate and inspire learning in different ways (and allow more experienced users to adjust their own pacing), they are not necessary in order to learn.
Do I have to buy Gems?
No. You can also earn Gems by reaching your daily goal and completing skills. This means that you can earn Gems every day just by practicing your language (even more if you finish new skills).