In the crypto world, when a developer launches their application, they face the decision of deploying it either on the mainnet or testnet.
This distinction is crucial not only for decentralized application developers but also for crypto investors. Investors need to be aware because the same cryptocurrency on both networks can have different values.
To comprehend the significance of the differences between these two networks, this article will elucidate what sets them apart and the implications for a crypto token or coin.
Understanding Testnet and Mainnet Differences
Mainnet and testnet are two distinct networks operating within the same blockchain. For instance, the widely known Bitcoin blockchain has both mainnet and testnet.
Mainnet is where developers launch their applications in a live environment, allowing users to engage in real transactions.
Testnet, on the other hand, serves as a testing ground for developers. While users can interact with the application, the transactions on testnet have no real value.
As an example, consider the Velar application on the Bitcoin and Stacks blockchains, a decentralized finance (DeFi) platform facilitating buying and selling through swap features and providing passive income through staking and farming.
Upon launch, Velar has versions on both mainnet and testnet. Features like Swap and Pool are active on the mainnet, enabling users to conduct real transactions and liquidity provision. However, for features like stake or farm, users are directed to the testnet version.
In the testnet version, a new feature called “faucet” emerges. This feature is a result of using tokens specific to the testnet, which cannot be converted to fiat as they are essentially “fake” tokens used for testing.
Despite being on different networks, the crypto retains the same name. For example, transitioning from Bitcoin on mainnet to the testnet version will still be referred to as Bitcoin, with an indication that it operates on the testnet.
Crypto on Testnet and Mainnet
The key difference lies in the type of crypto used – mainnet involves real, tradable crypto, while testnet involves tokens that cannot be converted to fiat.
This understanding is vital for investors to avoid falling prey to misleading schemes or expecting real value when receiving tokens or coins from an application.
Especially during airdrop seasons, where applications may request users to transact with crypto on testnet, users need to be cautious.
These transactions may not require actual investment and may result in rewards in the form of points, indicating eligibility for airdrops or free tokens from a new project.
Another notable distinction is the acquisition process. On mainnet, investors typically purchase crypto through centralized or decentralized platforms. Conversely, obtaining crypto on testnet often involves visiting a faucet, as mentioned earlier.
Faucets vary in their requirements, with some expecting users to return the received crypto after use. Despite being testnet tokens, their supply is limited and may mirror the mainnet crypto.
Faucets differ in the crypto they supply, but one sure thing is, one faucet usually only supplies one kind of crypto.
For example, the picture above shows a faucet that looks more simple and usually offers older generations of crypto like Bitcoin.
But in the picture below, the interface seems a bit nicer which is usually the case for faucets that offer new generations of crypto such as Stacks.
Both of them have the same mechanism where users only need to request cryptos and then send their wallet address on the faucet.
But some might limit the amount of crypto users can take considering the limited supply of some crypto that was discussed before in this article.
Understanding these differences allows investors to navigate the crypto world more effectively. During airdrop seasons, investors should exercise caution against fraudulent faucets to minimize the risk of fund theft through dusting attacks on their wallets.
In conclusion, always use reputable faucets recommended by the application undergoing the testing process to mitigate potential risks.
