Testnet

Testnet is a public Bitcoin-protocol network that runs Bitcoin's consensus rules with intentionally worthless coins. It exists for developers and operators to test wallets, transactions, and node configurations without risking real mainnet BTC.

Testnet currently runs as testnet4 (the third reset, launched in 2024). Earlier versions (testnet, testnet2, testnet3) were replaced with fresh chains once their coins started trading for real money or their difficulty quirks made them unusable; Bitcoin Core still carries testnet3 but marks it deprecated, with removal planned for an upcoming release. The current testnet4 has:

• Free coins from faucets. Various sites give out small amounts of testnet BTC to anyone who asks. They're effectively worthless.
• A separate genesis block and network magic. Testnet chains are not the same as mainnet; transactions and addresses are not interoperable.
• A modified difficulty rule. If 20 minutes pass without a block, the next block uses minimum difficulty so the chain doesn't stall during low-activity periods (the first block of each difficulty period must still be mined at the real difficulty, and testnet4 changed the retarget math so the exception can no longer trigger the block storms that plagued testnet3). Mainnet has no such escape hatch.

The drawbacks of testnet:

• It's chaotic. Difficulty swings wildly, blocks can come in bursts or droughts, abusive actors spam it. You can't rely on testnet behavior to predict mainnet behavior.
• Test BTC has occasionally become traded. Despite being officially worthless, testnet coins have been bought and sold, and scammers have run airdrop schemes on the chain; trading was what forced the very first reset.
• Not appropriate for security-sensitive testing. If you want to test a high-stakes upgrade under realistic adversarial conditions, Signet is usually a better choice.

For most casual development - "does my wallet work, can I broadcast a transaction, what does fee handling look like" - testnet is fine. For anything more serious, look at Signet or a private regtest network.