Cryptocurrency and blockchain terminology gets thrown around by so many different people in conversation without everyone really understanding what they are saying. Eric takes a look at what is a mainnet, and what exactly is an airdrop so you can make better blockchain and cryptocurrency choices.
What exactly is a Mainnet? An Airdrop?
Blockchain technology is going to change the world. Yes, that is cliche and easy to say, but I firmly believe that. However, it would be naive to ignore the fact the cryptocurrency industry is rampant with speculation, embellishment, and ignorance. I have participated in countless conversations where myself or another individual clearly does not possess a full understanding of the topic of hand.
For example, I have talked about “main net launches” without even knowing exactly what they are. I believe this very sentence once came out of my mouth: “Tron is launching their mainnet this summer and the price is going to sky-rocket.” The person on the other end of my statement took this as an absolute fact and considers me to be a reliable source of crypto-related topics.
Little did he know that I was simply regurgitating something I heard from a YouTube video. Hopefully, he did not take my advice because the price went down since I said that.
Strictly out of fear of being called out on my own BS, I figure it is important to actually grasp what I am saying. So, I decided to look up two commonly talked about terms in the crypto-space to avoid looking like a complete moron!
The two terms are “Mainnet” and “Airdrop.”
What is a Mainnet?
Did you know almost every Blockchain project has mainnet? I sure didn’t! The actual use of a mainnet will blow your mind. Basically, it is the functionality that actually carries out the transfer of a cryptocurrency from senders to recipients (Definition from Coincentral).
It is scary to think that so many projects do not have their mainnet launched yet… meaning the MOST basic function of the coin (sending it back and forth) has not even been tested! Speaking of testing, a TESTnet is the test of this functionality in the form of a prototype. Once the mainnet is ready for public use, holders of that currency can actually perform the action of sending it to someone else.
According to Coincentral, mainnets are “important because they prove or disprove the ability of a project to take a blockchain project from ideation to implementation.”
Before this absolutely BRUTAL bear market where it seems like any news will have no effect on anything… a good investment strategy might be to purchase a coin before the mainnet launch with the idea that a successful launch will result in a price increase. Now it seems like nothing will make a price increase besides a partnership with Amazon, Apple, or Tesla.
***Also it is important to realize that mainnets are constantly improving and changing.
Wait, so people actually plan on sending these cryptos to each other? Right now it seems like crypto is an unproductive asset, meaning nobody is doing anything with it (besides buying it and selling it.) Jamie Dixon, CEO of J.P Morgan chase said to CNBC: “When you’re buying non productive assets, all you’re counting on is the next person is going to pay you more because they’re even more excited about another next person coming along.”
I think about this all the time. What are people actually doing with their cryptos holdings? NOTHING!? Mine are sitting on an exchange waiting to be swiped up by some hacker! Even with Bitcoin I feel like people are desperately hoping the price will go up (or down) without planning on using it. Besides the silk road, where are the consistent USE cases!? Yes, I know there are some random stories/rumors that houses and cars are selling for Bitcoin, but I am talking about someone YOU actually know using it…
Now, what the hell is an Air Drop?
Airdrop is another term I always hear. I am pretty sure it just means “free coins.” After looking up the definition it turns out I was basically correct!
An Airdop essentially awards coin/token holders new coins in proportion to their existing holdings. An Airdrop occurs for multiple reasons: one being it creates “buzz” around a specific projects because everyone wants free stuff, especially free currency. Also, according to CoinCentral, it helps decentralize the circulation of the coin by spreading it to people around the world who hold it.
Airdrops can also be a scam to get people to invest in particular coin. So always BEWARE. For example, a coin can market that the first “10,000” people who buy into a coin will get an Airdrop to encourage investment. Then the developers/team behind that coin can never Aidrop the coin…which would suck.
Here is a Twitter account to keep you updated on Airdrops:
Hopefully these definitions help with your conversations!