I am trying to understand what it means when someone mentions that their product is 'based off' or 'added' to the Ethereum blockchain.

I am new and trying to get a handle of this:

  1. Why have a new coin if its based off/added to the ethereum blockchain ?
  2. If a new coin is based off the Ethereum blockchain, does it make sense to only buy Ether? Seeing as the new coin is based off Ether. If the new coin's price rises, ether's price is bound to rise as well.
  3. Lets say all these new coins can be mined, do we need a special miner for all these coins? Can I use just 1 miner? If yes, how does the miner know what coin it has found?
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Why have a new coin if its 'based of' and / or 'gets added' to the ethereum blockchain ?

Ethereum is a decentralized platform that runs smart contracts.

When someone says the coin based on the Ethereum it's mean that coin used the Ethereum contract feature.

That feature allows to create a tradeable digital token that can be used as a currency. These tokens use a standard coin API so your contract will be automatically compatible with any wallet, other contract or exchange also using this standard.

If a new coin is based on the Ethereum block chain , does it make sense to only buy Ether ? since new coin is based of Ether .

In order to run the code in smart contracts you need the Ethereum Gas(Ether), hence to use a new coin you need ethereum.

if new coin's price rises , ether's price is bound to rise as well.

That's might be true, but it's depends on many thing:

  • How many coins you have emitted.
  • How many gas needed in order to interact with your coin.
  • What the actual rate of your coin (how much ether your coin cost).

Lets say all these new coins can be mined, do we need a special miner for all these coins ? can I use just 1 miner, If yes, how does the miner know what coin it has found).

No, you don't need a special miners.

All you need is a function in the contract that function can produce your coins as many as you want just by running mine function in your contract or you can set initial supply without mine function and you'll have limited supply of your coins).

Ref#1 Ref#2

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