Testnet bitcoins (tBTC) are supposed to be worthless. After all, the purpose of these coins are to allow for testing without risking real money.
However, these coins are getting difficult to get hold on and the faucets are running dry. Will testnet coins soon be traded for real money?
What is testnet exactly?
The Bitcoin Core software lets you chose between two networks. The default is mainnet, or simply Bitcoin. The alternative is testnet. These are two separate blockchains, but in principle near identical. These can both be mined with the same hardware, they both have a limited coin supply, and they are both decentralized. All the good stuff with bitcoin applies to testnet too!
Most wallets and block explorers support both networks. If you are new to bitcoin I recommend you first make a testnet wallet, play around a bit, and only when you feel more confident you set up your real bitcoin wallet.
How do I get testnet coins?
Mining is not practical. The testnet hashrate is over 300 TH/s. If you have a computer with a powerful GPU you will contribute less than 1 MH/s, i.e. your chance of finding any given block is less than 1 in 300 million. Even with pooled mining I doubt you’ll reach the payout threshold anytime soon. Only ASIC hardware will ensure you find a block. But shelling out $5000 for a 90 TH/s Antminer defies the concept of free testnet coins.
Faucets do work. At least a few still do. Coinfaucet.eu gave me 0.017 testcoins and I can request more in 12 hours. uo1.net, gave me the hourly limit of 0.00087 coins. Nicolas Kuttler sends out coins manually but you need to wait a day or two. The rest did not work. You can check this Bitcointalk thread to find active faucets.
The above shows that tBTC has some value. A few ASIC’s worth of mining power goes into the network, i.e. thousands of dollars are spent on this. Be it for testing, philanthropy or speculation I don’t know. The faucets are struggling. Guess why! Because demand outstrips supply.
This quote from the forum proves my point:
“If i don’t know you and you have a legit usecase for the tBTC i’ll lend you as much as you’d need without interest but i still require enough real BTC as collateral”
Developers face a shortage
The 0.018 tBTC or so you can easily get from faucets is not always enough for testing. Recently I experimented with embedding NFT art on the blockchain. The entire art piece itself got embedded in an enormous testnet transaction. The wallet refused since I didn’t have enough tBTC for the default miner fee.
I could wait 12 hours for more coins from the faucet, or I could beg for coins in the forums. In either case I would waste valuable time (but in my case I was lucky to have leftover tBTC from earlier).
The bottom line; it’s easier just to pay for some testnet coins.
How to buy testnet coins?
I googled this extensively but could not find a single exchange. You need to find a person willing sell to you. Try contacting someone on a forum. Good luck with that!
Why no marketplace?
I think a lot has to do with the apparent paradox:
- Testnet coins are useful because they have no value
- If testnet coins had value, they would be useless
I think this logic is flawed. As I mentioned before, there is a real cost of moving away from testnet. Therefore as the network has value, so should its coins.
There’s also a stigma or taboo about trading testnet coins. They are deemed to be for free, so anyone daring to sell will be called nasty names!
(Which is ridiculous, testnet is just a public blockchain with scarce tokens just like any other blockchain, nothing more, nothing less).
On top of all this, the bitcoin developers would surely try to reset the testnet if people start trading the coin.
Can they reset testnet?
They did it in 2011 and guess why … because people started paying for testnet coins! And in 2012 they reset testnet again, but this time for a technical reason. From then on the current version, testnet3, has been in use.
Today I don’t think it would be that easy to reset testnet. Ten years back bitcoin was very small.
Today I suspect a reset would create too much headache. A lot of services are built around testnet. In theory it shouldn’t matter if testnet got reset. All services would consider it a reorg all the way back to the genesis block. In reality I believe a lot of applications would need expensive developer hours to oversee the reset. In other cases there may be ongoing experiments which would be destroyed by a restart. Although I don’t have the full understanding of how this would unfold, I think a reset lead to some mess.
Also worth mentioning is that correctly speaking, testnet cannot be reset, just as bitcoin itself cannot be reset. What they would do is have a future Bitcoin Core use a new empty testnet4 as their testnet, and those wishing to continue using testnet3 would need to keep using an old Bitcoin Core or another bitcoin client. This itself could jeopardize the main bitcoin chain, and maybe this is why testnet3 has been left untouched for so many years?
Bitcoin Core has recently introduced signet:
Signet is similar in nature to testnet, but more reliable and centrally controlled. There is a default signet network (“Signet Global Test Net VI” as of this writing), but anyone can run their own signet network at their whim.
For testing purposes signet has some advantages but testnet has more network effect, so I don’t think testnet is going away anytime soon.
When will tBTC get a monetary value?
Finally, if we agree that
- tBTC has some value, and
- Testnet can not be shut down
it is only a matter of time before people start trading them for money. I think it can happen at any moment. At least for as long as crypto remains hot. Most likely someone will do a trade over a forum. Maybe someone sets ups a simple vending macine on a website? And an exchange will follow.
How valuable can tBTC get?
The developer demand is not significant.
The speculator perspective is what matters. The supply is low with many of the coins lost and a block reward of <o.1 tBTC. If people start paying for these coins it’s impossible to say where the price ends up.
Maybe we can draw a parallel to Dogecoin? It was supposed to be a joke. Now it’s the 4th most valuable crypto by market cap. The market sometimes does the opposite of what is intended. If or when testnet coins gain some value, a huge controversy will result. All this attention attracts speculators, and so the cycle feeds upon itself.
I don’t have a crystal ball. I don’t know if this will happen or not. But as the price of tBTC currently is 0, the risk-reward is 0-∞. It’s not often I come across something like this.