What Is A Mainnet?
One of two major features to look for before investing in a blockchain project
Mainnet is the central blockchain network of a final project for it to realize its claims on its whitepaper. Mainnet is the full development of a blockchain protocol where cryptocurrency transactions are launched, broadcasted, verified, and recorded on a DLT, that is, distributed ledger technology.
But before a project is launched in full capacity on the mainnet, it will be run first through a testnet for troubleshooting purposes. Developers and programmers are tasked to test a blockchain network project first on the testnet to make sure the system is secure and prepared for a mainnet launch. Testnets exist as prototypes for blockchain projects, whereas a mainnet is the fully developed blockchain platform now open to carry out trading transactions on the DLT.
As has been before any mainnet launch, the team behind the project will raise funds and build a community by setting up an ICO, or initial coin offering, or an IEO, that is, an initial exchange offering. Funds collected will help finance the development of blockchain network prototypes that will pass through the testnet phase. after correcting all bug fixes and the rate of the project’s optimal performance, it will be deployed on full functionality via its mainnet version. Many ICOs took a boom turn in 2017 as numerous start-up projects launched crowdfunding activities. Majority built their token on the Ethereum network using the ERC-20 standard, distributing them into the crypto wallets of investors commensurate to their contribution to the project.
A mainnet launch is a major factor in affecting the value of a token. The token or coin can increase in value as its trust rating will shoot up based on the team’s successful delivery of the project according to the white paper’s development roadmap.
After completing the ICO phase crowdfunding event, the team will release the mainnet version of the project having now their own native coin in place of the previously created ERC-20 token. a process called mainnet swap will be launched so that the previous ERC-20 tokens are swapped for the new blockchain coins. After completion of the mainnet swap, all remaining tokens are destroyed, and only the new native coins will be considered.
Investors are strongly advised to research if a blockchain project has a mainnet before investing in an Initial Coin Offering. The presence of a testnet and a mainnet is a guarantee that the team is serious in their project development. These two features can actually affect their coin’s price in many ways. For example, regular upgrades and revisions of mainnet functions can cause a major up pricing of the cryptocurrency. Continuous mainnet upgrades were the reason Bitcoin enjoyed numerous bullish runs.
When Lightning Network was proposed in 2015, it was a mainnet feature that added a second layer on the Bitcoin Blockchain. The mainnet update was significantly intended to increase the scalability of Bitcoin, thus, expanding its ability to handle more transactions per second. It resulted in the oldest cryptocurrency surging from below $7,000 to the $10,600 mark before settling to a $9,500 level.
Mainnet in cryptocurrency is an efficent and reliable way of measuring the success of any start-up project on the blockchain. It is proof that a blockchain project is currently underway, and the team behind is doing its best to make the project work effectively. Mainnet improvements will positively affect the price of the cryptocurrency involved both in the short and long terms.
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