What are the testnets of the future, and why are they important ?

5 min readAug 22, 2022

I’ve always been interested in computers and software, but my knowledge of cryptography was limited to the types of encryption that keep your credit card number safe when you buy something online.

Then I started to use a blockchain, the Bitcoin one, and then Ethereum, and from one blockchain to another, I though “why don’t I create a little Dapp myself?”. After hours of researchs, I had a problem : how could I pay for all the gas fees for just a test Dapp that I wanted ?

Today, let’s talk about how testnets are important to the crypto-space, and how it could evolve in a much more efficient tool. Ready to discover ? Let’s go !

What is a Testnet?

In my articles, we always start with the basics, just to be sure everyone is on the same page.

A testnet is a blockchain that is developed for testing purposes. It can be used to experiment with new features and applications without having to use real money.

Most of the cryptocurrencies have their own Testnets where you can try out new things without risking any actual money. The testnet coins are usually different from the main coin in terms of value, but they can be exchanged for each other on exchanges if you want to invest in them.

The most notable use case for testnets is when developers want to test a new feature before it is implemented into the mainnet. For example, if you want to make sure that your new version of your cryptocurrency wallet works properly with your updated code, you would deploy it onto the testnet first so that you can check if everything works as expected.

How does a testnet work?

The testnet is an alternative chain to the main network. It works exactly like a mainnet, with miners (for PoS). Let’s take the example of Bitcoin, the first testnet to exist :

Coins are separate and distinct from actual Bitcoin, and are never supposed to have any value. This allows application developers or bitcoin testers to experiment, without having to use real bitcoins or worrying about breaking the main network.
The testnet was launched with a genesis block for testing purposes and has different rules than the main network. For example, block rewards on the testnet are much smaller and there is no need for miners because blocks can be generated by anyone at any time.
You can use it to create a new wallet, send and receive coins in order to get familiar with Bitcoin. You can also run experiments on how new features like Smart Contracts work before they’re implemented on the main chain.

Types of testnets

The two most popular types of testnets are:

➢ Run by a single entity who provides the entire hashpower and pays a small fee for each transaction, usually around $0.05. This is useful if you want to quickly set up your own private blockchain with low latency, but it’s not very flexible if you want to use the same testnet for multiple purposes (such as testing different consensus algorithms).

➢ Run by many different entities who provide their own hashpower, in proportion to their stake in the network (e.g. 1/10th of all blocks are mined by each miner). This is more flexible and better suited for real-world use cases, but it also has higher latency than “private” testnets because every block must be broadcasted to all miners first before being mined.

The central role of the testnet in crypto development

The testnet is the main reason why cryptocurrencies are so well suited for building applications.

The testnet allows developers to experiment with different development tools, such as the Ethereum Wallet and Mist browser, without having to spend money on their own private blockchain.

The Ethereum Foundation provides a free testnet environment that anyone can use to deploy smart contracts, build decentralized apps (dapps), or take advantage of any other features of the Ethereum platform. This network is called Ropsten.

Example of Ethereum 2.0 which goes through a lot of testnets before mainnet

The Ethereum 2.0 roadmap is a full node software release that will allow for greater scalability and performance. The Ethereum 2.0 roadmap was first proposed by Vitalik Buterin in January 2019, which included details on what would be included in the new version of Ethereum: Casper FFG, sharding, and Plasma.

Ethereum 2.0 is a major upgrade to Ethereum’s blockchain that will include numerous improvements such as sharding, scalability and privacy-preserving technologies like zk-SNARKS (zero knowledge proofs). The goal of this update is to increase the throughput and scalability of the network by making it easier to process transactions at once. This will be achieved by splitting up the network into smaller parts called shards which can process transactions in parallel.

The Ethereum team has been working on different testnets since early 2018 and has released several versions of them so far: SputnikVM (Testnet 1), Ropsten (Testnet 2), Kovan (Testnet 3) and Rinkeby (Testnet 4). Each of these testnets uses different consensus algorithms and each one has its own use cases.

Conclusion : testnets of the future ?

What will be the testnets of the future? One answer are testnets on Directed Acyclic Graph.

The current state of testnets is very limited. They are mostly used by developers to test their products and by miners to improve their rigs. Some projects also use them to run a temporary blockchain before launching their mainnet. However, they are not really useful for other purposes.

A few projects have tried to improve on this situation but they still have limitations. For example, Stellar has created an innovative way to run a testnet using its own currency (the stellar lumens). This sounds good but it’s not really useful because it doesn’t allow much experimentation with smart contracts or dApps.

I believe that there is room for improvement in this area and it’s a new type of testnet: DAG-based testnets!

Thanks for reading ! I hope you enjoy the content, and all is from my personal knowlege, so there are probably some errors ! That’s why I can always encourage you to search by yourself 😉