Mainnet and testnet are terms that you should understand when learning about cryptocurrency to evaluate a project. Today, invest286.com will help you better understand these two terms, if you are also wondering what a Mainnet is, what a Testnet is, then take a look at the detailed information right here.
What is a Mainnet? What is a Testnet in crypto 2024?
What is a Mainnet in crypto?
- Independent Mainnet: a mainnet that has its own coin and blockchain platform, independent of any other blockchain platform. Examples include Bitcoin, Ethereum, Solana, Polkadot.
- Mainnet through another platform: is a project built on another layer-1 blockchain platform, and transaction data on the new blockchain platform will be stored on the layer-1 blockchain platform. However, the coin used to operate this mainnet will be the original coin of the project, not the platform. For example, Chainlink (LINK) conducts its mainnet on Ethereum, and Chainlink’s data will be stored on Ethereum’s blockchain, but the coin used to carry out actions on the Chainlink network is LINK, not ETH.
Overall, the launch of the Mainnet is a step that marks maturity as well as creates an impression and trust among investors in the cryptocurrency field. After a successful launch, the Mainnet may often be updated to fix code errors or update new features.
Continuous upgrading and modifying the mainnet functions is mandatory if a cryptocurrency project wants to succeed under high price conditions. Bitcoin is a project that has achieved great success in this field, partly because of the upgrades of the Mainnet.
However, as of now, the launch of the mainnet is not as much noticed as before because there are too many projects launching mainnets at the same time.
Why is a mainnet needed?
+ Mainnet shows credibility: A project with a mainnet is certainly more trustworthy than one without; the presence of a mainnet allows the formation of a living ecosystem of participants, allowing real-time transparent interactions and transactions.
Without a mainnet, a blockchain project is entirely conceptual with no operational product for participants to test.
Mainnet is proof of development: many projects are only drawn on paper without real development. The presence of a mainnet indicates that a project is active and progressing technically.
What is a Testnet in crypto?
Imagine if you send cryptocurrency worth thousands of USD without testing to see if the blockchain works properly, you could lose that money. Therefore, developers must have measures to prevent this from happening and testnet is used to ensure the safety of user assets. Essentially, all transactions are in demo mode during the testnet phase.
In recent times, the testing of testnets has garnered more attention as blockchain projects reward individuals for discovering bugs by offering real money or project tokens. This approach also helps projects attract developers who are genuinely interested in their project.
After the testnet phase, projects often conduct an initial coin offering (ICO) to raise development funds for the project’s future.
Why is Testnet Important?
Testnet supports the creation of a stable and usable environment, including all necessary hardware and software components to perform test scenarios and identify errors.
Reduces Unnecessary Costs: All transactions on the blockchain require fees, which will be frequent and repetitive during the testing phase. If real money is used for transactions on a faulty blockchain, the funds may be lost. Testing on the mainnet would be costly and could harm the reputation of the cryptocurrency project, so a testnet is necessary.
Ensures Mainnet-Like Quality: Developers require a test environment that closely resembles the mainnet. This helps to discover and fix issues before the mainnet launch.
Compatibility: Tokens on the testnet may not be compatible with tokens on the original blockchain or vice versa. This requires the creation of new coins or technologies, leading to a prolonged, complex, and significantly more expensive process.
However, all new projects must first be tested on a testnet, a separate blockchain from their original blockchain. Developers can check every component of the blockchain before it is released, and any mistakes or errors will not affect the original blockchain platform.
Compare Mainnet and Testnet in crypto
Token Price Changes for Some Projects After Mainnet Launch
Some Related Questions About Mainnet and Testnet
A private mainnet is when a project launches the main network but does not make it public for everyone, instead, they set up a firewall to block external connections. Private mainnets are most commonly associated with the Pi Network project.
Mainnet Launch refers to the launch of the mainnet. It typically signifies the day when the project’s mainnet is released to the public.
Mainnet Swap is the process of converting tokens on a platform’s blockchain to the project’s official blockchain. For example, Band Protocol initially launched its mainnet on Ethereum, and the BAND token was an ERC-20 token. However, when Band had its own blockchain platform, Band Chain, it conducted a mainnet swap to migrate all BAND-ERC20 tokens to Band Chain.
The answer is both yes and no. In reality, some projects experience a short-term price increase after launching their mainnet, but then the price may drop significantly, on average by 40 – 60%. According to statistics, coins of projects with low market capitalization (below $10 million) tend to experience higher price increases during mainnet launches.
For more useful information, check out:
- What is Liquidity Pool? Which Liquidity Pool should you join?
- What is Yield Farming? Yield Farming vs Staking – which is better?
Hopefully, you now understand what mainnet and testnet mean, as well as the importance of mainnet and testnet. If you have any further questions about mainnet or testnet, please feel free to leave a comment, and we will respond as soon as possible.
