First thing is EC2 is a compute service whereas EBS is a Storage service. EC2 Instances can be launched using either Elastic Block Store (EBS) or Instance Store volume as root volumes and additional volumes.
Now, an instance store is ephemeral storage that provides temporary block level storage for your instance. Instance store is ideal for temporary storage like buffers, caches, and other temporary content. After every reboot data will be lost.
And an “EBS-backed” instance means that the root device for an instance launched from the AMI is an EBS volume created from an EBS snapshot. It behaves like a raw, unformatted, external block device that can be attached to a single instance and are not physically attached to the Instance host computer. The Volume persists independently from the running life of an instance. After an EBS volume is attached to an instance, you can use it like any other physical hard drive. As EBS provides physical hard disk in instance, so it's depends on us what we want to store.
Hope it will help you