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A testnet, or testing network, is an alternative blockchain used for testing purposes. Testnets simulate the environment of a blockchain, allowing developers to test new features or smart contracts without risking real assets or impacting the main network. Transactions on a testnet do not carry any real value and allow for a safe environment to identify bugs and verify system integrity. Testnets are crucial in the development and deployment process of blockchain technologies, ensuring that applications run smoothly before being launched on the mainnet (the main network).