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People actively involved in bitcoin and cryptocurrency will have heard developers refer to the testnet on more than one occasion. However, a lot of people still do not realize what such a testnet is, or why it is even useful. One should never underestimate the power of a testnet by any means, as it provides a valuable testing ground for future changes made to a particular cryptocurrency.

One of the primary reasons why a testnet exists is for developers to perform specific tests. To be more specific, when bitcoin developers try to introduce some changes to the protocol such as Segregated Witness they have to ensure the concept is thoroughly tested first and foremost. This can be done relatively easily on the testnet, since it is an alternative version of the primary Bitcoin blockchain.

As one would expect, currency stored in bitcoin wallets on the regular network are not visible on the testnet. However, the testnet has its own set of bitcoins, also referred to as testnet coins. These coins have no value whatsoever, though, and cannot be traded don any exchange. However, the coins can be used to perform testnet transactions, ensuring everything is working as expected.

The primary reason why the testnet is so important is for developers and other coders to experiment with new code and solutions. In doing so, they are not disturbing the main bitcoin network, nor are they forced to use bitcoins which actually have a value. More importantly, if a proposed code change were to go awry, it will have no impact on the main bitcoin ecosystem. The testnet is a pure testing environment and should always be treated as such.

It is worth mentioning there have been quite a few iterations of the bitcoin testnet. Testnet1 was designed first as you would expect. When testnet2 came around, it introduced an official testnet reset with a different genesis block. This change was necessary as some people traded testnet coins for real money.

As of right now, the network uses Testnet3, which was part of the Bitcoin Core 0.7 release. Once again, a new genesis block was introduced to avoid the mining difficulty from ramping up or decreasing too fast. Theoretically, there is a fourth bitcoin testnet, although it is only used for Segregated Witness. This bitcoin scaling solution was first tested on the SegNet, which saw the light of day on December 21st of 2015.

As one would expect, the bitcoin testnet sees far fewer transactions compared to the main blockchain. That is only normal, since very few users actively transact on the testnet on a daily basis. It also has a much smaller blockchain due to there being far fewer transactions taking place. As of right now, the testnet blockchain is roughly one tenth of the main bitcoin blockchain.

Every cryptocurrency in existence has their own testnet, all of which are activelyused by developers to introduce new features. To be more specific, every developer should usethe testnet availability, although not all of them may do so in the end. Every testnet has its own wallet system to test transactions, and there are quite a few faucets out there which will disperse testnet coins to new users.

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What is a Cryptocurrency Testnet? - The Merkle