Blockchain networks are an interesting topic because they come in all shapes and sizes. So, in this post, my goal is to use my inner experience as CEO of Koinos Group (Koinos developers) to demystify testnets and maybe give some insight into why this affects the price.
The best place to start is with a name: testnet. The purpose of the testnet is to test the network. At a very high level, there are two “flavors” of the testnet. The first is the test net released before the main net (main net) and the second is the test net released after the main net is already running. The functions they perform are similar, but the context in which they are published greatly influences the perception and effect of the publication.
I start with the second type of testnet because it is in some ways the most obvious context. When talking about existing networks like Bitcoin and Ethereum, test networks serve two main functions. First, it is a live environment in which developers can test their decentralized applications. Every good developer knows that there is no perfect code, so testnets provide developers with an environment very similar to the “main chain” (eg Ethereum) where they can effectively test their code without risk. Anything running on the testnet is expected to fail and the tokens used will be useless.
Related: London Fork Enters Ethereum Testnet As Bombers See Delay
Thus, testnets are an environment in which DApp developers can add value to their applications (i.e. improve applications) precisely because full functionality or value creation is not expected. In a sense, the value of testnets stems from their uselessness.
DApp developers versus blockchain developers
But testnets are two-way in nature, which brings us to the second function that testnets serve, and this feature is beneficial not to the DApp developer, but rather to the platform developer (in our case, the blockchain developer). One of the things I was surprised to see from my unique perspective is how often DApp developers mix with blockchain developers. Usually, those who write smart contracts are not blockchain developers, and blockchain developers usually spend very little time writing smart contracts.
Ironically, Koinos solves this problem because their entire system is implemented in the form of smart contracts! Since Koino smart contracts are scalable, this means that any feature can be added to the blockchain without a hard fork, but it also means that people who develop the blockchain (as members of the Koinos group) use and develop the same tool chain. and a set of tools. what developers will use. to create your own DApps. But this feature is completely unique to Koinos, so we can put it aside for discussion.
In all other blockchains, blockchain developers have to develop updates regardless of the programming language the blockchain is written in (C ++, Rust, Haskell, etc.), and they work with a very large and complex system called “monolithic architecture”. … In monolithic structures, changing any part of the system can affect any other part of the system, so the risk of making changes is much higher.
Blockchain developers also need a low-risk environment that they can use to test their changes and see what breaks. Like application developers, they want this environment as close to the real web as possible, which means that they want their code to interact with code that application developers also run.
The two sides of the testnet
This exposes two aspects of testnets. It allows application and platform developers to interact with each other and safely test their code as close to life as possible, but with very low risk. This allows both groups to improve their products and make them more valuable to users.
We can now begin to understand why test networks affect the price of the token. If we assume that price is a function of cost, and test networks help developers add value to their products, then a price effect should be expected. The problem is that this association led to several undesirable results. Projects often give developers a useless “testnet” for the sole purpose of raising the price of their tokens. Unfortunately, many will see testnet ads and will only assume that something of value has been released, so the action will have the desired effect on the price.
Test network in front of the main network
So far, I’ve focused on the usefulness of testnets in the context of the current blockchain, which is that they create a safe space for app developers to test.