There are three types of resources that need to be considered when working on EOS: RAM, CPU, and NET.
CPU refers to the processing power you can use on the EOS network, and accordingly, NET refers to the network bandwidth you are allowed to use. Both resources are measured as the average usage in the past 3 days. The more EOS you stake, the more resources you are allowed to use.
RAM is used to store data in the blockchain. Users will need RAM to sign new EOS accounts, add information to their account (like the ownership of other EOS tokens) and dApps will use RAM to store state information of their application so it is quickly available when needed. In both cases, RAM is used to store records on the EOS blockchain.
EOS is design to handle many millions of transactions per seconds, and thus, requires a super-fast infrastructure that relies heavily on RAM. EOS RAM allocation algorithm is based on Bancor’s formula.
In the case of creating a new account on EOS, some RAM should be purchased to store the actual account details (such as the account name and creation date). At the moment, 4K of RAM should be sufficient. (Yes, in EOS, one needs to pay in order to create a new account.)
One more thing to keep in mind in the context of RAM is when an EOS account accepts a new type of EOS token for the first time, a new record is added to the blockchain. The storage space for that record needs to be purchased. Going forward from that point, any additional transaction of the account with this type of token won't cost anything (even if you zero the account entirely, there’s still a record on the blockchain stating you hold zero tokens of the given type).
Click here to learn more about the advantages and disadvantages of the EOS blockchain.