There are three types of Dragonshards that you can acquire in your travels, they are used for varying purposes and are detailed below.
 Eberron Dragonshards
Eberron Dragonshards are collectibles that you can exchange with various NPC's for items. They can be stored in Collectibles Bags.
 Khyber Dragonshards
Khyber Dragonshards get used in Crafting and serve as material component for the Trap the Soul spell. They can be stored in Ingredients Bags.
 Siberys Dragonshards
Siberys Dragonshards get used for Feat swapping with Fred in House Jorasco. Fragments can be stored in Ingredients Bags.