Testnet coins, also known as test ethers or test tokens, hold value only within the testnet environment and cannot be used as real currency. However, they serve a crucial purpose in allowing developers and users to experiment with and test various functionalities of blockchain applications without using real funds. With testnet coins, users can deploy and interact with smart contracts, test decentralized applications, simulate transactions, and perform comprehensive testing to ensure the smooth functioning of their applications before deploying them on the mainnet.