Deployment to the mainnet is always the high point of any new blockchain project. This idea implies that the project will have to undergo a pre-production phase where the whole musings around it will be tested. Ideally, a project is first launched on a temporary network called a testnet, tested differently, and fine-tuned in readiness for launch on a mainnet.
Unlike many other crypto terminologies, mainnet (and testnet) can be understood easily through their names—Mainnet- Main network, Testnet- Test network.
What is the meaning of mainnet?
A mainnet is a fully-fledged blockchain that uses its technology and cryptocurrency. In contrast to testnets, mainnets are blockchains ready for deployment or live use. A mainnet is a blockchain network that facilitates the transfer of digital assets from a sender to a recipient. Mainnet is simply the leading network on which actual transactions are recorded on a distributed ledger.
In cryptocurrency, the mainnet is the final product of blockchain projects that allow users to send and receive digital assets or currencies. Mainnets change from time to time as project teams determine the need for updates or revisions. Furthermore, crypto-based mainnet launches will be required to include a wallet system.
What mainnet is not
While every blockchain project operates on a mainnet, it is important to note that not all project have their independent mainnet. Consider Apecoin, Shiba Inu, and DIA, which run on Ethereum Network; their transactions run on an existing mainnet. Hence they do not have their mainnet.
In some cases, a team of developers might be unable or unwilling to launch their mainnet, yet, they have the option of launching their token on an existing mainnet. However, it is possible for them to move their own mainnet in the future. I.e., EOS.
Characteristics of crypto mainnet
1. Network for activities that have a bearing on the market value of crypto:
Mainnet is the network where activities and operations have a bearing on the market value of the cryptocurrency that operates on a particular blockchain. Every function on the mainnet has a monetary value to keep the network safe from attacks or misuse.
2 The reward for mining and validation:
The only mining and validation with rewards that have a real economic value are the ones carried out on the mainnet.
3. The store of the actual history of the blockchain:
The mainnet operations are what form the network’s distributed ledger, that is, the history of the blockchain. This history is protected by all possible resources of the network’s parties to ensure the immutability of the DLT. The genesis of the blockchain is the first block of this history.
4. ID and Rules:
The mainnet is identified with an ID and rules that distinguish it from testnets. In Bitcoin, for example, the mainnet network only allows the use of addresses 1, 3, and bc1, whereas the testnet uses addresses 2 and tb1.
5. Prior test of features and technology
Every feature or technology that makes it to the mainnet has undergone rigorous testing. Before they are approved for use on the mainnet, blockchain developers thoroughly test all these technologies.
Difference between Mainnet and Testnet
Miannet refers to when a blockchain protocol is wholly developed and deployed; cryptocurrency transactions are broadcasted, verified, and recorded on a distributed ledger technology (blockchain).
In contrast to mainnet networks, testnet refers to when a blockchain protocol or network is not yet fully operational. Developers need to test and troubleshoot all aspects and features of a blockchain network before the mainnet launch to ensure the system is secure and ready.
In other words, a testnet is only a working prototype for a blockchain project. In contrast, a mainnet is a fully developed blockchain platform that allows users to send and receive cryptocurrency transactions.
Process of launching a mainnet
The launch of a new cryptocurrency mainnet involves significant resources. These include paying for the product, community development, and promotion. As a result, before launching a mainnet, a crypto development team will frequently seek to raise funds. It is typically accomplished through an Initial Coin Offering (ICO) or an Initial Exchange Offering (IEO).
During an ICO, cryptocurrency developers sell blockchain-based tokens to early investors, who then trade the tokens among themselves. While the process is very different, the general idea is the same as with an Initial Public Offering (IPO). A company uses an IPO to raise money for the first time directly from the public stock market.
When Ethereum held its own ICO in 2014, it created a sensation for the concept in the crypto world. In 2017, there was a surge in ICOs. If a group of cryptocurrency developers hasn’t yet launched their mainnet but still wants to sell tokens, they may choose to do so on top of an existing one. Ethereum, for example, allows for the creation and trading of alternative tickets (such as the ERC-20 standard).
A group of developers hoping to launch their mainnet soon could raise funds by selling ERC-20 tokens with the promise of future value when they found their mainnet. Developers are ready to tackle the mainnet once funding has been secured, development and testing have been completed, and project hype is in motion.
The following stage is known as the mainnet swap, which entails exchanging the ERC-20 tokens for the new coins on the blockchain. The new coins are typically destroyed once the mainnet trade is completed. This process ensures that only new coins are used, not old ones.
Mainnet Launch and Crypto Prices
Many analysts have tried establishing the nexus between the mainnet and crypto prices. Some have written about the launch of mainnet on crypto price, while others have written about the impact of mainnet upgrades. One of the observations on the effect of a mainnet launch is that crypto prices rise before it and fall after. TokenGazer found out in research in 2019 carried out on 11 mainnet launches between September 2017 and June 2018 that token prices generally increased before the mainnet launch and dropped after it. However, it added that much of this can be explained by the broader cryptocurrency market’s downturn at the time. The token research house, therefore, examined the token’s share of the total cryptocurrency market capitalization. They discovered that the market cap of the majority of tokens was highest at the time of the mainnet launch. The market cap increased before the launch and then decreased afterward. Early investors may book profits if the mainnet launches successfully. A successful mainnet launch could also result in the release of tokens held by members of the development team, potentially adding a new source of sell pressure.
Whereas the mainnet’s performance metrics may fall short of expectations, a mainnet may be unable to deliver the promised high-tops rate.
Mainnet Upgrades and Crypto Prices
Continuous upgrades and revisions to the mainnet function are required if a cryptocurrency project achieves widespread success in price increases. Bitcoin is one project that has seen tremendous success in the sector, thanks partly to Mainnet upgrades. In 2018, after initially falling from highs of $10,600, the mainnet promotion helped push the cryptocurrency’s price from below $7000 to highs of $9,500 in the following weeks. In March of the same year, the largest cryptocurrency by market capitalization launched Lightning Network, a cryptocurrency mainnet feature that added a second layer to the blockchain. The Off-chain solution was a significant update designed to make Bitcoin more scalable, allowing the blockchain to handle more transactions per second. The Ethereum price was also on a bullish run some weeks after the network upgrade, known as Merge. Track Ethereum price at Gate.io crypto exchange. However, the upgrade has not resulted in price gains which some have blamed on the timing.
Launching a mainnet moves crypto technology from theoretical speculation to real-world deployment. The entire emerging, decentralized crypto financial system is built on mainnets. The crypto revolution would not have begun if mainnets had not been launched.
Satoshi Nakamoto, a pseudonymous developer, kicked things off in mid-2009 with the launch of the Bitcoin mainnet. The launch came just a year after Nakamoto published the first crypto “whitepaper” outlining how Bitcoin would work. The Litecoin mainnet went live in 2011, and the Dogecoin mainnet went live in 2013. In 2015, Ethereum’s mainnet was the first to support smart contracts, and others followed.