03/03/2019 Blockchain News, Crypto, News, Opinion
The blockchain era has largely been defined by grandiose promises and ambitions, but little to show for it.
For most companies, even those that successfully complete ICOs, we usually hear loud guarantees of life-changing and revolutionary technology. In the end, however, these “game-changers” end in the same place most others do, the dustbin of history. Reports of a vast majority of blockchain projects fizzing out or simply vanishing have become common, and those applications still around are forced to shoulder the burden and standard of the industry.
In this climate, where observers are turning an increasingly critical eye to the sector and are warier than ever to new platforms making wild promises. As such, it’s become more crucial than ever for blockchain firms to actively demonstrate their value, and more importantly, that they have technology that actually works. This is where Testnets come in—offering a tangible proof of work that shows off the technical capacity and does more than empty promises.
The ability to demonstrate a blockchain or cryptocurrency platform’s abilities beyond a white paper or demo is becoming increasingly vital as the industry starts to whittle down its useless projects. Some see testnets as unnecessary, or as window dressing for apps that should already be launched as a mainnet release, but there is still value in them.
ENOUGH TELLING, IT’S TIME TO SHOW
There is a growing sentiment around the blockchain industry that a majority of projects are essentially worthless. The consensus is emerging for a few reasons, but it’s hard to argue with the naysayers. For one, you’d be hard-pressed to point out true blockchain applications that have disrupted their chosen industries. Moreover, studies that have found that more than 80% of ICOs were essentially scams, and more concerningly, only roughly 15% of all projects launched actually made it to exchanges.
Projects like PayCoin, which promised to revolutionize cryptocurrencies while simply rehashing old altcoins, launch with grandiose promises but often end in failure. Others, like OneCoin, take advantage of market hype to create scams and offer nothing new to the sector. These projects have a real impact on the technology’s viability by creating a state of distrust and a credibility crisis. Ernst & Young reported that nearly 10% of $3.7 billion ICO funds raised have been stolen or lost. Even when they are not scams, most projects tend to fizzle. A study found that nearly 70% of small-cap tokens are now worth less than their ICO price.
Even so, it’s hard to argue that blockchain has real potential, and that there are projects worth investing in and embracing. While there are countless “bitcoin-killers” and projects that run almost entirely on hype, there are those that choose to show their worth with actions and real applications. Even so, for many users, the idea of purchasing cryptocurrencies and using their money on an application they’re unfamiliar with may not sound appealing. Similarly, for developers who are already working on familiar platforms, simply hearing about revolutionary tech may not move the needle.
Here is where having testnet releases can be incredibly valuable for blockchain companies. While many projects talk a big game and overpromise their platforms’ capabilities, projects that release testnets can walk the walk. COTI, a payments and stablecoin-oriented blockchain protocol, for instance, recently launched its own testnet, enabling mainstream companies and blockchain platforms to try out and start implementing their own applications. In cases like COTI’s, the goal is to demonstrate potential to major partners and businesses looking to adopt their tools.
Other testnets are simply about showing off processing power or providing proof of concept. Insolar, for instance, recently launched a testnet that reportedly logged over 10,000 transactions per second. In some cases, testnets are more about developer communities and giving them the ability to test out new protocols in a less risky environment. They also allow companies to fine-tune projects before releasing mainnet versions, a crucial task for massive platforms and unique protocols.
MOVING BEYOND PROOF OF CONCEPT
Most importantly, perhaps, is that testnets are confirmation that projects have moved beyond the theoretical stage and are finally on track with actual development. Such was the case with Tron’s testnet announcement, which, while met with some skepticism, still provided validation for investors and the project enthusiasts. As such, they’re vital in generating interest for blockchain projects which rely on massive userbases for their ultimate success. This extends to everything from nodes to the miners that make operation possible.
Even so, it would be disingenuous to deny that a testnet isn’t always a guarantee of success, or even of eventual mainnet releases. Those who were skeptical about Tron’s testnet would correctly point out that there can be weeks, months, and even years between a testnet and mainnet release, and things can change greatly in that time. Moreover, testnets can go poorly if the technology underlying them isn’t working as advertised.
Nevertheless, testnets are still valuable for blockchain. More than beta testing or QA, they are foundational steps for companies in an industry that needs them more than ever. By providing glimpses of potential instead of simply telling us about them, blockchain projects can affirm our faith in them, and actually move past an idea or proof of concept. Even as the ICO craze passes and the blockchain sector shifts to adapt to the new normal, more platforms releasing testnets should always be seen as a good thing. In the end, it’s about showing value, instead of telling us about it.
Also read: How S.E.C.I. is your Blockchain
To discuss: “Studies that have found that more than 80% of ICOs were essentially scams”