Mainnet

Key Takeaways

The blockchain and crypto ecosystem is full of new concepts and technical jargon, and this can make it hard to get involved if you’re brand new. One very common term you’ll hear, but might not be familiar with, is mainnet. Understanding mainnets is essential for anyone interested in joining the growing number of cryptocurrency users.

In this article, we’ll review what a mainnet is and how it works, and provide some examples to you can get to grips with this crypto-native term.

What Is a Mainnet?

A mainnet is the primary network in the blockchain space where transactions take place. Mainnets are fully developed, live versions of a blockchain. They act as the settlement layer, and finalize all of the transactions taking place on the network. In essence, a mainnet is a layer 1 network, meaning it forms the foundational architecture of a blockchain protocol.

Mainnets possess several defining characteristics:

• Finalization of Transactions: Mainnets are responsible for finalizing transactions, ensuring that once a transaction is confirmed, it is irreversible and recorded on the blockchain permanently.
• Layer 1 Network: As layer 1 networks, mainnets provide the base layer of the blockchain, enabling other layers or applications to be built on top of them.
• Decentralization and Security: Mainnets are typically decentralized, with security measures in place to protect against attacks and fraud.

These characteristics make mainnets vital to the functioning of cryptocurrencies and blockchain-based applications. Without a mainnet, there would be no secure and decentralized environment for conducting transactions, verifying data, and maintaining the integrity of the blockchain.

How Does a Mainnet Work?

Mainnets are the foundation layer of the blockchain, verifying transactions and adding new blocks of transactions.  When you initiate a transaction, it is broadcast to the network via the mainnet, where nodes validate the transaction using a consensus mechanism, such as Proof of Work (PoW) and Proof of Stake (PoS). 

Cryptography keeps all of this secure, preventing double-spending and maintaining the security and integrity of the blockchain.

Mainnet vs Testnet – What’s the Difference?

Perhaps the best way to grasp “what is a mainnet?” is by contrasting it with its counterpart, the testnet.

While mainnets are fully operational networks where real transactions occur, testnets are experimental versions of these networks. You can think of a testnet as the staging site, or test dummy, of a mainnet blockchain.

Developers use testnets to test and polish new features, smart contracts and updates, before deploying them on the mainnet. The primary difference between the two lies in their purpose and the type of transactions they handle.

• Mainnet: Processes real transactions with real value, ensuring that all operations are secure, verified, and immutable.
• Testnet: Used for testing and experimentation, handling dummy transactions that do not hold any real value. With testnets, developers identify and fix bugs, test new features, and optimize performance without risking real assets.

For example, during Ethereum’s transition from Proof of Work to Proof of Stake in an event known as The Merge, developers used testnets to develop the new version of the network. The dev team first deployed and tested the changes on Ethereum testnets like Ropsten and Goerli to make sure everything worked as expected.

Once the tests were successful and the code was deemed stable, the changes were implemented on the Ethereum mainnet, completing the transition. 

The testnets provided a safe environment for experimentation and reduced the risk of potential errors and vulnerabilities.

Mainnets and ICOs

Mainnets were instrumental in the initial coin offering (ICO) boom of 2017. It was a period of rapid fundraising within the crypto industry, where new projects gathered capital by issuing their own tokens. In most cases, during an ICO, tokens aren’t deployed on their own mainnets but on an already existing one. For example, Ethereum provides an existing infrastructure for token creation and smart contracts.

This allows any new project to easily deploy their token on the Ethereum mainnet. Throughout the ICO boom, this led to massive investments from around the world. However, due to the lack of regulation in the space, we also saw numerous scams and failed projects.

Mainnet Examples

The cryptocurrency ecosystem includes numerous mainnets, each with its own unique characteristics and functions. Here are four notable examples:

Ethereum

Ethereum’s mainnet is one of the most widely used and well-known in the blockchain world. Launched back in 2015, Ethereum introduced the concept of smart contracts. Its mainnet supports decentralized applications and various token standards such as ERC-20 and ERC-721. 

Thanks to the existing infrastructure, numerous projects such as DeFi platforms and NFTs emerged on Ethereum. After The Merge update, Ethereum switched from Proof of Work to Proof of Stake, replacing miners with validators to keep its network secure and decentralized.

Bitcoin

Bitcoin’s mainnet, was launched in 2009. It’s the original and most recognized blockchain network. To this day, Bitcoin operates on a Proof of Work consensus mechanism, where miners validate transactions by solving complex cryptographic puzzles. 

Bitcoin’s mainnet is designed to be a peer-to-peer electronic cash system, enabling users to transfer value without the need for intermediaries. By using the Script language, developers can deploy smart contracts on the Bitcoin network.

Binance Smart Chain

Binance Smart Chain (BSC) is a blockchain network developed by Binance, one of the largest cryptocurrency exchanges in the world. Launched in September 2020, Binance designed BSC to run parallel to Binance Chain, and support smart contracts and decentralized apps.

One of the key features of BSC’s mainnet is its compatibility with the Ethereum Virtual Machine (EVM). This allows developers to port their Ethereum-based projects over to BSC with ease. BSC uses the Proof of Stake Authority consensus mechanism, which combines elements of both PoS and Proof of Authority, enabling fast and low-cost transactions.

XRP

The XRP Ledger, often referred to as the XRP mainnet, is a decentralized blockchain network specifically designed for fast and cheap cross-border payments. Launched in 2012 by Ripple Labs, the XRP Ledger uses a consensus algorithm called the Ripple Protocol Consensus Algorithm. 

It doesn’t require mining and it allows the XRP Ledger to process transactions quickly and efficiently. The XRP mainnet is particularly popular among financial institutions and payment providers looking to leverage blockchain technology for international payments.

Closing Thoughts

Mainnets form the foundation of the blockchain ecosystem, ensuring that transactions are securely processed and recorded in a decentralized manner. Without mainnets, decentralized applications simply wouldn’t be possible.

Vulnerabilities in the mainnet or any downtime could have catastrophic consequences, which is why developers rigorously test and refine the code on a testnet before deployment. As a result, mainnets have attained an almost sacred status due to the need for absolute perfection in their code.