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If I have valid private key to use on Bitcoin mainnet, can I use the same key to generate addresses and spend on testnet? If so, is this encouraged, or should one generally keep separate keys to use on mainnet and testnet?

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Yes. A valid private key can be used either on testnet and mainnet. But key reuse is never a good thing, even within the same chain. Just use two different wallets, it's free!

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